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Federal Trade Commission imposes ban on location data and prohibits information brokers from performing certain tasks

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The Federal Trade Commission (FTC) in the United States has taken a firm stand against the unauthorized collection and sale of geolocation data by prohibiting two companies from engaging in such practices. X-Mode Social Inc and its successor Outlogic LLC, along with InMarket Media LLC, have been banned from selling sensitive location data and will face fines for their actions.

The action taken by the FTC comes in response to complaints filed earlier this year against the two companies for their unauthorized collection and commercial use of geolocation data without obtaining proper consent from consumers. It was discovered that X-Mode Social Inc had been selling the acquired geolocation data to government contractors under the pretext of national security purposes, while misleading users by assuring them that their location details would only be shared with advertising companies.

This is not the first time that the FTC has taken action against data brokers. In 2014, similar orders were issued against nine companies involved in selling user information to marketing entities. At that time, the FTC proposed a plan to Congress aimed at increasing transparency among data brokers. However, progress on this initiative slowed down after 2020, just before the end of Donald Trump’s presidency.

The recent intervention by the FTC is seen as a crucial step in deterring and mitigating cyber-crimes to some extent. When companies involved in the unauthorized sale of sensitive data are forced to cease their activities, the demand for such illicit data decreases among cybercriminals. Additionally, if information is sourced from alternative channels, its price increases, making it less accessible to smaller-scale hackers who engage in phishing and ransomware attacks.

The ban on the collection and sale of geolocation data by the FTC sends a strong message to companies that engage in such practices. It emphasizes the importance of obtaining proper consent from consumers before collecting and utilizing their sensitive data. This move is expected to have a ripple effect on the data brokerage industry, leading to increased scrutiny and a stronger focus on consumer privacy rights.

As technology continues to advance, the protection of personal data becomes increasingly important. The unauthorized collection and sale of sensitive information can have far-reaching consequences, including privacy violations, identity theft, and exposure to cyber threats. By taking a proactive stance against such practices, regulatory bodies like the FTC are working to create a safer and more secure digital environment for consumers.

In conclusion, the FTC’s decision to ban the collection and exploitation of geolocation data by certain companies is a significant step towards protecting consumer privacy and deterring cyber-crime. This action serves as a reminder to all companies that handle sensitive data to prioritize consumer consent and adhere to ethical data practices. It also highlights the ongoing efforts of regulatory bodies to adapt to the evolving landscape of technology and safeguard the rights of individuals in the digital age.

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