FTC Says ‘Creepy’ Ad Listening Tool Failed to Work
▼ Summary
– The FTC settled with Cox Media Group, MindSift LLC, and 1010 Digital Works for nearly $1 million over deceptive claims about their “Active Listening” ad service.
– The companies falsely claimed they could target ads using audio from smart devices with consumer consent, but the FTC says they only bought email lists.
– CMG blamed a third-party vendor for the marketing materials and said it stopped using the product after the issue arose.
– The settlement requires the companies to stop misrepresenting their marketing services and audio data collection practices.
– The combined $930,000 will go to businesses that bought the service based on the false claims about voice data targeting.
The Federal Trade Commission announced Thursday that Cox Media Group, along with MindSift LLC and 1010 Digital Works, have agreed to pay a combined total of nearly $1 million to settle allegations that they misled business clients about a service called Active Listening. The FTC claims the companies falsely promised they could target ads based on audio recordings captured from consumers’ smart devices.
In a statement provided to WIRED, a CMG spokesperson said, “We are pleased to have this matter resolved. Our local marketing team relied on marketing materials provided to us by a third-party vendor about their product. We withdrew the materials expeditiously and stopped further use of the product.” MindSift and 1010 Digital Works did not immediately respond to requests for comment. (Disclosure: The author of this article previously worked for the FTC.)
For years, conspiracy theories have circulated about companies using phone microphones to eavesdrop on conversations for ad targeting, but those claims have repeatedly been debunked. The marketing around Active Listening, first reported by 404 Media, reignited those fears. According to the FTC, a website promoting the service once featured the tagline: “Creepy? Sure. Great for marketing? Definitely.”
The FTC’s three separate complaints allege that CMG made several claims about its ability to collect conversations from “smartphones, smart TVs, smart speakers and other devices” and then use AI to deliver targeted ads based on location and spoken content. The companies also asserted that consumers had given consent for the collection and use of their voice data. The FTC, however, says none of this was true.
Instead, the FTC contends that CMG’s offering was “nothing more than consumer email list buying” and that the lists were resold at “a significant markup over the cost of the data.” In other words, the service did not work as advertised.
As part of the settlement, CMG, MindSift, and 1010 Digital Works have agreed not to misrepresent their marketing services or the collection and use of audio recordings or transcripts of consumer conversations. CMG will pay $880,000, while MindSift and 1010 Digital Works each pay $25,000. The combined $930,000 will go to businesses that purchased the Active Listening service under the false impression that it functioned as promised, including the claim that consumers had consented to the use of their voice data.
The FTC’s complaints do not address whether it is illegal to use audio recordings from smart devices for ad targeting. Instead, the agency’s focus is on the deception. “It is a basic rule of business that you need to be honest with your customers, and these companies failed to do that,” said Christopher Mufarrige, the FTC’s director of the bureau of consumer protection.
(Source: Wired)
