California: Privacy Victory Against Corporate Surveillance – FTC Bans Sale of Medical Location Data by Outlogic

In a groundbreaking move for privacy rights in the United States, the Federal Trade Commission (FTC) has issued a ban on the sale of individuals’ medical location data, marking a significant victory in the ongoing battle against corporate surveillance. The ban, announced on Tuesday, is the result of the FTC’s investigation into Outlogic, a smartphone surveillance company formerly known as X-Mode Social. Outlogic, which bills itself as the “second largest U.S. data company,” had been tracking individuals through more than 100 smartphone apps.

Under the terms of the settlement, Outlogic is now prohibited from selling or sharing any person’s private location data that could potentially be used to track someone to sensitive locations such as healthcare facilities, domestic abuse shelters, or places of worship.

FTC’s Unanimous Decision

The FTC’s decision to accept the consent agreement and impose this ban was unanimous, reflecting the agency’s commitment to safeguarding individuals’ privacy rights. FTC Chair Lina Khan emphasized the importance of this ruling, citing a U.S. Supreme Court ruling that extended constitutional protections against unchecked government surveillance to geolocation tracking, even when the data is originally collected by private companies.

Khan emphasized that the growing trend of profiting from personal data has led to the widespread trade and exploitation of Americans’ location information. Openly selling such data can subject individuals to various risks, including harassment, discrimination, and even physical harm, as highlighted by the FTC.

Outlogic’s Troubling History

Outlogic, formerly operating as X-Mode, gained notoriety in 2020 when it was exposed for selling users’ personal data to the U.S. military. The company used a precise location-tracking app that also masqueraded as a Muslim prayer app, garnering 98 million installations. At that time, X-Mode’s CEO, Joshua Anton, revealed that the company was tracking 25 million devices within the U.S. monthly, along with an additional 40 million devices globally.

Although Outlogic did not directly sell abortion-specific data, the FTC’s complaint specifically mentioned the ease with which the highly specific location data provided by the company could be used to identify individuals seeking abortion services.

The commission noted that this location data could enable tracking of individuals who have visited women’s reproductive health clinics, potentially indicating involvement in sensitive medical procedures like abortion or in vitro fertilization. Utilizing the data provided by X-Mode, third parties could potentially identify consumers visiting healthcare facilities and trace their mobile devices to specific residential addresses.

Implications for Social Media Advertising and Healthcare Apps

The FTC’s decision is expected to have significant implications for advertising practices on social media platforms that rely on users’ geolocation data for targeted advertising. The rise of virtual medical care and the proliferation of unregulated health-based apps during the pandemic have raised concerns about patient privacy breaches.

Furthermore, data brokers have been actively buying and selling patient mental health data with minimal oversight, posing a serious threat to user privacy. The lack of federal regulation in this space has led to a complex web of state data privacy laws, placing additional pressure on websites, data brokers, and social media companies.

Calls for Legislative Action

This ruling comes amidst increased scrutiny of how social media platforms collect and utilize children’s data. Companies like Facebook, Instagram, and TikTok have faced criticism for their data practices concerning minors. Forty-one states are currently suing Facebook and Instagram’s parent company, Meta, alleging that the company lured teenagers with harmful content and then profited from the data it collected, including geolocation and other sensitive personal information.

In response to the settlement, Senator Ron Wyden commended the FTC for its action against Outlogic but also called for legislative action to address broader privacy concerns. He highlighted the need for comprehensive privacy legislation to protect Americans’ personal information and prevent government agencies from acquiring data from data brokers.
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As privacy concerns continue to take center stage in the digital age, this FTC ruling sets a significant precedent in the ongoing battle to protect individuals’ sensitive data and ensure accountability in the corporate surveillance landscape. The case against Outlogic underscores the importance of transparency, oversight, and the role of advocacy groups in advocating for privacy rights in an increasingly data-driven world.

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