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  • Philip Osadebay - Tech Journalist

The FTC prohibits a US data broker from selling location data in a global event

Outlogic, previously known as X-Mode Social recently became the first US-based data broker banned from selling detailed location data of American citizens by the Federal Trade Commission (FTC). This action comes as a result of the company violating consumers' privacy rights through the sharing and selling of sensitive location information, marking the FTC's initial settlement with a data broker regarding such practices.

The commission found that Outlogic sold precise location data, which could potentially be used to track individuals' visits to sensitive places like medical clinics, places of worship, and domestic abuse shelters. The FTC emphasized that the company failed to implement sufficient safeguards on the use of this information by third parties, potentially exposing people to discrimination, violence, emotional distress, and other harms.

FTC Chair Lina M. Khan spoke about the importance of geolocation data, stating that it can reveal various aspects of individuals' lives, including medical treatments and places of worship. The FTC's action shows that businesses do not have the freedom to market and sell Americans' sensitive location data without consequences.

In an instance, Outlogic sold information about consumers who visited specific medical facilities and pharmacies in Columbus, Ohio, to a private clinical research company. The raw location data sold by Outlogic is associated with mobile advertising IDs, unique identifiers linked to each mobile device, and is capable of matching an individual consumer's device with their visited locations.

Outlogic failed to inform users of its apps, Drunk Mode and Walk Against Humanity, about how their location data would be used. The company also neglected to employ necessary technical safeguards, allowing Android users to opt out of tracking and personalized ads.

Under the settlement, Outlogic is obligated to delete or destroy all unlawfully collected location data from mobile apps unless it desensitizes the data or obtains consumer consent to keep it. Despite this action by the FTC, some experts and lawmakers believe that more comprehensive privacy legislation is necessary to protect Americans' personal information.

The ongoing lack of legislative action raises concerns, with critics of the FTC arguing that the agency may be overreaching without clear legal standing until Congress explicitly outlaws the sale of private user data without explicit consent.

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