FTC to Require Cox Media Group to Pay Nearly $1million to Settle Charges They Deceived Customers About “Active Listening” AI-Powered Marketing Service
35 points by simonw
35 points by simonw
Posting this as a follow-up to a 136 comment conversation we had about this story here on Lobste.rs last year.
TL;DR: the companies who claimed they could target ads based on "active listening" through device microphones were lying, they could not do that, and they have now been penalized by the FTC for those lies.
CMG, MindSift and 1010 Digital Works claimed their “Active Listening” branded marketing service listened in on consumers’ conversations overheard by smart devices, in real time, to target advertising [...]
According to the complaints, this service did not, in fact, listen in on consumers’ conversations or use voice data at all—nor did the service accurately place ads in customers’ desired locations. Instead, the service the companies provided consisted of reselling—at a significant markup—email lists obtained from other data brokers.
I find it fascinating that if the device had worked, there would have been no legal pushback (probably) in the US. Listening in to whatever anyone in a household says and analysing it to target ads, is a business model clear enough that no-one buying what this company said they were selling was worried about whether the practice was illegal.
The real fraud was that they said they were listening and targetting, but actually were not!
I think it would have violated several laws, both federal and state.
The FTC mention how user consent hidden in terms and conditions wouldn't count:
Instead, the companies claimed that consumers had “opted in” by agreeing to the terms of service that people have to accept when downloading and using apps. Clicking through mandatory terms of service does not constitute “opt-in consent” for such an invasive service or for use of consumers’ voice data from inside their homes. If the Active Listening service had functioned as advertised, this collection and use of consumers’ voice data without adequate consent would itself violate Section 5 of the FTC Act.
Thanks for the clarification! I should have read the post itself instead of going by the title.
I'd love to know who those deceived customers were. That is, who was trying to pay money for this thing that would, if it existed, be a horrible violation of privacy.
People who were buying ads - the kinds of customers who you would show this deck to: https://www.documentcloud.org/documents/25051283-cmg-pitch-deck-on-voice-data-advertising-active-listening/
Since that deck is branded "CMG Local Solutions" I'm assuming this was small businesses trying to advertise in their local area.
I'm going to guess they weren't particularly sophisticated or privacy-aware buyers. They probably wanted to get ads for their car dealership in front of people in their area who might want to buy a car.
I don't think you have to be particularly sophisticated to realise that this is awful. It fails the pub test - "we pay a company that listens to people through their phones, without their knowledge, to know when they might want to buy a car".
I think part of the problem here is that so many people already believe the conspiracy theory that phones show you ads based on spying through your microphone that it's easy to sell potential advertisers on that without raising red flags for them.
This is why I care so much about debunking this conspiracy theory when it's not true. I want to live in a civilization where people understand that this is NOT OK and actively push back any time it looks like it might be happening.