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FTC Takes Action Against Data Brokers Over Privacy Violations

Updated on December 3, 2024

2 Min Read
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The US Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) are cracking down on data brokers accused of exploiting sensitive consumer information for profit, national security threats, and invasive surveillance, several news sources revealed.

The actions signal a growing push to regulate an industry that trades in Americans’ most personal data.

The FTC announced settlements with Gravy Analytics and Mobilewalla, two prominent data brokers accused of unlawfully collecting and selling consumers’ location data, reported WIRED.

The sensitive information was allegedly used to track individuals near churches, military bases, domestic abuse shelters, and doctors’ offices, raising significant privacy and ethical concerns.

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Mobilewalla faced accusations of racial profiling during protests following George Floyd’s death, with claims that it tracked protesters’ movements to Black churches and Hindu temples. Gravy Analytics allegedly collected 17 billion daily location signals from over a billion devices, selling the data to entities like the Department of Homeland Security and the FBI.

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Under the settlements, the companies must delete previously collected sensitive data and are banned from further collecting such information without proper consent. For the first time, military installations were added to the FTC’s list of sensitive locations off-limits for data collection.

FTC Commissioner Alvaro Bedoya emphasized the blurred lines between corporate and governmental surveillance, noting, “Governments have long relied on private companies for work that would be illegal for law enforcement,” as quoted by WIRED.

As per The Record, on the same day, the CFPB proposed new rules to classify data brokers as consumer reporting agencies, subjecting them to stricter regulations under the Fair Credit Reporting Act (FCRA).

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The proposal would restrict the sale of Social Security numbers, phone numbers, and financial data unless explicitly authorized by consumers. These measures aim to limit the abuse of sensitive information, particularly for identity theft, stalking, and fraud.

CFPB Director Rohit Chopra highlighted national security risks posed by unregulated data brokers, referencing incidents where data on US military personnel was sold to hostile actors. “Our adversaries don’t need to hack anything,” Chopra stated, as quoted by The Record. “Data brokers are making this data available to anyone willing to pay.”

The regulatory actions spotlight systemic vulnerabilities in how personal data is handled. Critics argue the rules don’t go far enough, leaving gaps in oversight and accountability. Privacy advocate Justin Sherman stressed, “For all the essential work being done, the ultimate solutions require legislative action to regulate an industry that harms all Americans.”

While the proposals face uncertainties under the incoming Trump administration, the emphasis on privacy, national security, and consumer protections represents a critical shift in how the US addresses data exploitation. Lawmakers, such as Senator Ron Wyden, praised the efforts, calling the brokers’ practices “outrageous violations of Americans’ privacy”, as per WIRED.

FTC’s push to regulate data brokers underscores the broader need for accountability in an increasingly data-driven world, with significant implications for consumer rights and digital privacy.

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Hafsa Tahir

Hafsa is a content marketer who has been in the organic growth space for the past three years. With her background in Psychology and UX, she enjoys reading users' minds and is keen to try the most creative product marketing angles. Her copies scream: "you're not just a paycheck to us". Loves to crack unfunny jokes, pay gym fee and not go, and write psychologically disturbing short stories for some reason.

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