Judge dismisses FTC’s case against mobile data broker Kochava

On Thursday, a federal judge dismissed a complaint by the Federal Trade Commission against mobile data broker Kochava, which accused the company of selling consumers’ precise location data. (via MediaPost)

U.S. District Court Judge B. Lynn Winmill in Idaho ruled that even if FTC’s allegations were true, they wouldn’t demonstrate that the company posed a ‘’significant risk’’ of harm to consumers.

The government agency filed a lawsuit against Kochava in August last year, alleging that it sold consumers’ precise location information, which it said could easily reveal their visits to sensitive places. 

It said the data could be used to identify “consumers who have visited an abortion clinic and, as a result, may have had or contemplated having an abortion,” and also “medical professionals who perform, or assist in the performance, of abortion services.”

The agency alleged that Kochava was engaging in unfair business practice, and requested an injunction to prevent it from doing so.

Kochava, on the other hand, argued that even if the FTC’s allegations were proven true, they wouldn’t show that it was engaging in unfair practices. 

The company said that there was no basis for an injunction since its ‘’privacy block’’ feature already removes identified health service locations from its marketplace. Meanwhile, the feature was introduced just before Kochava was sued by the FTC.

In its complaint, the FTC said that Kochava’s sales of location data were unfair because of two reasons. Firstly, consumers may be exposed to discrimination, stigma, violence or other harms after third party companies access their location data. Secondly, the supposed breach of privacy was significant enough to be seen as an injury.

The federal judge said that the agency’s first argument was ‘’plausible’’, but that the complaint didn’t include any claims that consumers had actually suffered from their location data being sold to third parties.

At the same time, he rejected the second argument, saying that ‘’the purported privacy intrusion is not severe enough to constitute ‘substantial injury’’.

The judge explained that any ‘’private information’’ drawn from Kochava’s data are unreliable due to inferences.

“For example, geolocation data showing that a device visited an oncology clinic twice in one week could reveal that the device user suffers from cancer,” Winmill wrote in his 35-page decision. “Or it may instead reveal that the person has a friend or family member who suffers from cancer.”

He added that the information that can be accessed from location data “is generally accessible through other, lawful means.”

“A third party may, for example, observe a person’s movements on public streets and sidewalks as they go to and from home or a medical facility,” he explained. “A third party may also discover a person’s home address by reviewing publicly accessible property records.”

Also Read: Kochava acquires app marketing company Machine Advertising

The same day, Kochava’s Chief Executive Officer Charles Manning called the dismissal ‘’an important step toward resolving this matter.’’

“We are encouraged by the fact that the court was receptive to our arguments that the FTC’s allegations fall short,” Manning said. He added that Kochava abides by all rules and laws, “including those specific to privacy.”

Meanwhile, since the case was dismissed without prejudice, the government agency will be able to revise its case again.