Data privacy is under threat. Learn how data brokers exploit your personal information.
Data privacy is under unprecedented threat in our digital age. On December 3, 2024, the Federal Trade Commission (FTC) unveiled a groundbreaking legal action against Mobilewalla, a data broker that epitomizes the invasive world of personal data trading.
This post exposes the alarming reality of how our most intimate location data is being collected, traded, and exploited without our explicit consent.
FAQs
A1: A data broker is a company that collects personal information from various sources and sells or trades this data to other businesses for advertising, marketing, or other purposes.
Q2: How do data brokers collect my information?
A2: Data brokers collect information through online advertising auctions, website tracking, mobile app permissions, public records, and other digital and offline sources.
Q3: Are there any regulations protecting consumer data?
A3: Regulations are evolving. The FTC and CFPB are proposing new rules, but currently, the responsibility largely falls on individuals to protect their own data.
Announcement Of Legal Action
On December 3, 2024, the Federal Trade Commission (FTC) announced a proposed settlement in legal action against a data broker named Mobilewalla, which was accused of using location data obtained through online advertising auctions to identify consumers by factors such as private home address and visits to health-care clinics and churches.
How Online Advertising Auctions Work
In an online auction, a data broker bids to place “real-time” ads for its clients on a consumer’s cell phone or other mobile device, based on consumer data shared in the auction, which typically includes a unique mobile advertising identifier (MAID) and the consumer’s location at the time of the auction.
The FTC alleged that Mobilewalla retained data regardless of whether or not it won the auction and made no reasonable effort to determine if consumers had given permission to use their data.
Data Collection And Usage
According to the complaint, between January 2018 and June 2020, Mobilewalla collected more than 500 million unique consumer advertising identifiers paired with consumers’ precise location data.
The raw location data Mobilewalla collected was not anonymized and the company doesn’t have policies to remove sensitive locations from the data set, meaning that such data could be used to identify individual consumers’ mobile devices and the sensitive locations they visited.
The company sold access to this raw data to third-parties, including advertisers, data brokers and analytic firms.
The company also used the data to create audience segments for their clients by processing it through virtual “geofences” around specific sites.
For example, MAIDs that appeared within geographic coordinates around pregnancy centers were used to build audience segments targeting pregnant women. Other targeted sites included churches, labor offices, LGBTQ+ locations, and political or protest gatherings.
Regulation of Data Brokers
Regulation of data brokers is a gray area, and this is the first time the FTC has alleged that obtaining consumer data from online advertising auctions for purposes other than participating in the auction is an unfair practice.
On the same day the FTC released its proposed settlement, the Consumer Financial Protection Bureau proposed a rule requiring data brokers who sell certain sensitive consumer information to be considered consumer reporting agencies under the Fair Credit Reporting Act, which would require them to follow more rigorous practices regarding accuracy, safeguards, and consumer access to their own data.
For now, however, this rule and the FTC settlement are only proposals
Privacy vs. Convenience
Regardless of government regulations, the burden for protecting your private information falls primarily on you.
Personal data is a valuable commodity, and there will always be entities, whether criminals or legitimate businesses, who want to obtain and use your personal information.
Protecting your data takes work, and you may have to choose between privacy and convenience.
The Mobilewalla case is a wake-up call for everyone concerned about data privacy. As technology advances, the battle for personal information intensifies. While regulatory bodies are beginning to take notice, the primary defense remains with individual consumers. By understanding the mechanisms of data collection, being vigilant about our digital footprints, and taking proactive steps to protect our information, we can reclaim our right to privacy in an increasingly connected world.
Contact your tax and financial advisors to determine the best moves for your situation.