FTC’s Landmark Decision: Halting the Sale of Sensitive Location Data by Data Brokers

In a groundbreaking move that champions reproductive rights and individual privacy, the Federal Trade Commission (FTC) has set a new precedent by banning the sale of sensitive medical location data. This decision marks a pivotal moment in the ongoing battle to protect the privacy of individuals seeking critical healthcare services, including abortion.

The focus of this historic FTC ruling is Outlogic (formerly known as X-Mode Social), a company notorious for tracking individuals through an array of smartphone apps. Outlogic is now strictly prohibited from selling or sharing any location data that could potentially track an individual to healthcare facilities, domestic abuse shelters, or places of worship. This ban represents a critical step in safeguarding personal privacy in an increasingly digital world.

FTC chair Lina Khan, highlighting the importance of this decision, stressed the dangers of unchecked surveillance and the trafficking of personal location data. Khan’s concern underscores the risks posed by such practices, including potential harassment, discrimination, and even physical violence.

Outlogic’s extensive reach in location tracking, encompassing more than 100 smartphone apps, had previously raised serious ethical questions. The company’s history includes providing location data to the U.S. military, as revealed by an investigation led by Joseph Cox of Motherboard in 2020. This revelation about the sale of personal data for military use underscores the critical need for stringent regulations on data privacy.

The FTC’s complaint against Outlogic specifically addresses the vulnerability of abortion seekers, highlighting the ease with which individuals could be tracked to healthcare facilities providing abortion services. The commission’s filing paints a concerning picture of how such precise location data could be misused.

The implications of Outlogic’s previous dealings are far-reaching, with connections to private intelligence firms like HYAS, known for their capability to track individuals “down to their physical doorstep.” This stark reality underscores the dire need for regulatory action to protect individuals’ privacy.

In a move to reinforce this new directive, Khan announced that Outlogic must delete all sensitive location data it unlawfully collected, including any derived models or algorithms. This comprehensive approach is a testament to the FTC’s commitment to safeguarding Americans’ sensitive data from corporate surveillance.

Outlogic’s response to the FTC’s policy highlights the company’s readiness to comply, albeit without significant changes to its business model. This response indicates a growing acknowledgment among data brokers of the need to align with evolving data privacy standards.

The FTC’s order could have far-reaching effects, particularly in the realm of targeted advertising on social media platforms, which often relies on users’ geolocation data. The rise in virtual medical care and unregulated health-based apps during the pandemic has further emphasized the need for robust patient privacy protections.

The legal landscape surrounding data privacy is becoming increasingly complex. With the rise in mental health data being bought and sold by data brokers, user privacy is at an even greater risk. The lack of federal regulation in this area has left social media companies navigating a complex web of state data privacy laws.

Meta, the parent company of Facebook and Instagram, is currently embroiled in a multi-state lawsuit alleging the exploitation of teen users’ data. Meta’s recent lawsuit against the FTC, aiming to avoid a $5 billion fine, highlights the ongoing tension between social media giants and regulatory authorities.

In response to regulatory pressures, Meta has announced content restrictions for teens on its platforms. However, children’s advocacy group Fairplay has criticized this move as insufficient and called for congressional action to address online harms to young users.

TikTok, another popular platform among American teenagers, has also faced scrutiny for its data collection practices. The platform’s algorithm has been criticized for exposing young users to extremist and violent content.

The collection of children’s geolocation data becomes even more concerning in the context of government contractors like Palantir, which has assisted in tracking and surveilling immigrant families.

The FTC’s decision to hold X-Mode accountable represents a significant step in protecting Americans’ privacy. However, as Senator Ron Wyden (D-Ore.) points out, legislative action is needed to ensure comprehensive protection of personal information and to prevent government agencies from circumventing legal processes by purchasing data from brokers.

This landmark decision by the FTC signals a crucial shift in the regulation of personal data, emphasizing the need for stringent privacy laws to protect individuals in an increasingly digitized society.