Federal judge clears path for FTC lawsuit against Kochava over location privacy violations

A federal judge has ruled against mobile data broker Kochava, allowing the Federal Trade Commission (FTC) to proceed with a lawsuit accusing the company of harming consumers by selling precise geolocation data. U.S. District Court Judge B. Lynn Winmill in Idaho issued the ruling on Saturday, stating that the FTC’s claims are both legally and factually plausible.

The heart of the matter lies in Kochava’s alleged sale of vast amounts of non-anonymized information about millions of mobile device users, including their precise physical locations, personal characteristics, religious and political affiliations, marital status, parental status, economic standing, and more. Judge Winmill acknowledged that if proven true, these actions could constitute a “substantial injury” to consumers, a key element in the FTC’s claim of unfair business practices.

Kochava founder and CEO Charles Manning expressed confidence in prevailing on the merits, emphasizing the company’s consistent compliance with privacy rules and laws. Manning stated, “Never in a million years did we imagine that as a small, law-abiding company we’d find ourselves in the ring on behalf of an entire industry.”

Kochava’s legal troubles stem from a 2022 lawsuit by the FTC, alleging that the company engaged in unfair practices by selling precise geolocation data that could reveal sensitive information.Despite Kochava’s defense that the data it sells isn’t personally identifiable, the judge’s ruling focuses on the potential privacy invasion resulting from the sale of such detailed information. Kochava’s counterargument, suggesting an attempt by the FTC to create data privacy law outside congressional channels, was noted but not addressed in the legal ruling.

Judge Winmill’s decision overturns his previous dismissal of the FTC’s initial complaint in May 2023, allowing the agency to strengthen its allegations and pursue the case again. The amended complaint, filed in June, contends that Kochava links precise geolocation data to identifying information about individual consumers, raising concerns about privacy violations.

The judge’s new ruling underscores specific allegations, including Kochava’s ability to make inferences about consumers and directly link mobile ad identifiers with identifying information. The potential for secondary harms, such as stigma or emotional distress, is highlighted, signaling the gravity of the privacy concerns raised by the FTC.

Kochava’s ongoing efforts to address privacy issues, including the introduction of a “privacy block” feature, are mentioned in the context of the legal proceedings. The ruling by Judge Winmill is seen as a noteworthy development in the ongoing debate over data privacy within the industry, with implications that extend beyond voluntary settlements to potential industry-wide impacts.