The FTC’s Crackdown on Location Data Misuse: InMarket’s Landmark Settlement

The Federal Trade Commission’s (FTC) January 18th enforcement actions signal a significant shift in the regulatory landscape concerning consumer privacy and data protection. One of the most striking instances of this change is the proposed settlement with InMarket Media, a Texas-based data aggregator. This case is noteworthy not only for its direct implications for InMarket but also for the broader message it sends to the industry about the handling of sensitive consumer data, particularly location information.

The Case Against InMarket

InMarket, known for collecting location data through various sources, including its apps and third-party applications, faced FTC charges for not fully informing consumers or obtaining their consent before using their location data for marketing purposes. The company’s practices included creating audience segments based on consumers’ visits to specific locations, enabling targeted advertising. What is alarming is the scope of this data collection, with InMarket maintaining nearly 2,000 audience segment lists with categories as specific as “parents of preschoolers” and “Christian churchgoers.”

FTC’s Stance: Protecting Consumer Privacy

FTC Chair Lina M. Khan’s statement underscores the agency’s stance on protecting Americans from “unchecked corporate surveillance.” The FTC’s complaint highlights that InMarket did not obtain informed consent from users of its apps, such as CheckPoints and ListEase, while also failing to ensure third-party apps using its SDK had obtained this consent. Furthermore, the FTC criticized the company’s policy of retaining geolocation data for five years as excessive and risky.

The Settlement: A New Precedent in Data Privacy

Under the proposed order, InMarket is to cease selling or licensing precise location data, a first for the FTC. This includes a comprehensive set of actions to protect consumer data, such as deleting previously collected location data, providing mechanisms for consumer consent withdrawal, and establishing a privacy program. These measures reflect an unprecedented level of regulatory intervention in the realm of data privacy, particularly concerning location information.

Implications and Future Outlook

This case, along with the FTC’s action against X-Mode Social and Outlogic earlier this month, represents a growing trend in stringent enforcement against the misuse of consumer data. The penalties are severe, with each violation of the order potentially resulting in a civil penalty of up to $51,744. These actions signal a clear message to companies about the importance of informed consent and responsible data handling. As the industry adapts to these changes, we may see a significant shift in how companies collect, use, and protect consumer data, with a heightened focus on privacy and transparency.

A Turning Point in Data Privacy

The FTC’s recent actions, particularly the InMarket settlement, mark a turning point in data privacy regulation. These developments are likely to have far-reaching implications, not only for data aggregators but for all entities involved in the collection and use of consumer data. As regulatory bodies intensify their focus on protecting consumer privacy, companies must reevaluate their data practices to align with these evolving standards, ensuring that consumer rights are at the forefront of their operations.

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