Data broker
X-Mode Social and its successor Outlogic LLC reached a settlement with the
Federal Trade Commission prohibiting the company from sharing or selling
sensitive location information.
This settlement
resolves claims that Outlogic, formerly known as X-Mode Social, violated
consumers' privacy for several years by selling their data to advertisers,
researchers, retailers and government contractors without permission.
Outlogic, which
has marketed itself as the second-largest U.S. location data company, also
agreed to delete all sensitive location data it collected illegally, and stop
disclosing such data unless consumers agree, the FTC said.
"Openly
selling a person's location data to the highest bidder can expose people to
harassment, stigma, discrimination or even physical violence," FTC Chair Lina
Khan said in a statement.
Americans
deserve protection from "unchecked corporate surveillance,"
she added.
The FTC said
Norfolk, Virginia-based Outlogic typically gathers data through its own apps,
software on third-party apps, and purchases from aggregators.
It also said
Outlogic would provide data purchasers with "audience segments" for
such disparate groups as "firehouses," "military bases" and
"size inclusive clothing stores."
"The
Commission rejects the premise so widespread in the data broker industry that
vaguely worded disclosures can give a company free license to use or sell
people's sensitive location data," Khan added.
In a statement,
Outlogic said "we disagree with the implications" of the FTC announcement
and said there was no finding it misused location data.
Outlogic also
said that since its 2013 inception, X-Mode has prohibited customers from "associating
its data with sensitive locations such as healthcare facilities."
The FTC’s
proposed order requires Outlogic to delete or destroy all previously collected
location data and any products produced from it, then implement procedures to
prevent its clients from connecting users with sensitive places and provide
consumers a clear way of withdrawing consent from the collection and sale of
their location data.
The agreement
will be open to public comment for 30 days after which the FTC will decide to
finalize it.
