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[Federal Register Volume 89, Number 235 (Friday, December 6, 2024)]
[Notices]
[Pages 96996-97004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28745]

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FEDERAL TRADE COMMISSION

[File No. 202 3196]

Mobilewalla Inc.; Analysis of Proposed Consent Order To Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of Federal law prohibiting unfair or deceptive acts or 
practices. The attached Analysis of Proposed Consent Order to Aid 
Public Comment describes both the allegations in the complaint and the 
terms of the consent order--embodied in the consent agreement--that 
would settle these allegations.

DATES: Comments must be received on or before January 6, 2025.

ADDRESSES: Interested parties may file comments online or on paper by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write ``Mobilewalla; 
File No. 202 3196'' on your comment and file your comment online at 
https://www.regulations.gov by following the instructions on the web-
based form. If you prefer to file your comment on paper, please mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex 
D), Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: David Walko (202-326-2775), Division 
of Privacy and Identity Protection, Bureau of Consumer Protection, 
Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule Sec.  2.34, 16 CFR 
2.34, notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been

[[Page 96997]]

filed with and accepted, subject to final approval, by the Commission, 
has been placed on the public record for a period of 30 days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
at https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before January 6, 2025. 
Write ``Mobilewalla; File No. 202 3196'' on your comment. Your 
comment--including your name and your State--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the https://www.regulations.gov website.
    Because of heightened security screening, postal mail addressed to 
the Commission will be subject to delay. We strongly encourage you to 
submit your comments online through the https://www.regulations.gov 
website. If you prefer to file your comment on paper, write 
``Mobilewalla; File No. 202 3196'' on your comment and on the envelope, 
and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Mail 
Stop H-144 (Annex D), Washington, DC 20580.
    Because your comment will be placed on the publicly accessible 
website at https://www.regulations.gov, you are solely responsible for 
making sure your comment does not include any sensitive or confidential 
information. In particular, your comment should not include sensitive 
personal information, such as your or anyone else's Social Security 
number; date of birth; driver's license number or other State 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure your comment does not include 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule Sec.  
4.10(a)(2), 16 CFR 4.10(a)(2)--including competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule Sec.  4.9(c). In 
particular, the written request for confidential treatment that 
accompanies the comment must include the factual and legal basis for 
the request and must identify the specific portions of the comment to 
be withheld from the public record. See FTC Rule Sec.  4.9(c). Your 
comment will be kept confidential only if the General Counsel grants 
your request in accordance with the law and the public interest. Once 
your comment has been posted on the https://www.regulations.gov 
website--as legally required by FTC Rule Sec.  4.9(b)--we cannot redact 
or remove your comment from that website, unless you submit a 
confidentiality request that meets the requirements for such treatment 
under FTC Rule Sec.  4.9(c), and the General Counsel grants that 
request.
    Visit the FTC website at https://www.ftc.gov to read this document 
and the news release describing the proposed settlement. The FTC Act 
and other laws the Commission administers permit the collection of 
public comments to consider and use in this proceeding, as appropriate. 
The Commission will consider all timely and responsive public comments 
it receives on or before January 6, 2025. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an agreement containing a consent order from 
Mobilewalla Inc. (``Mobilewalla''). The proposed consent order 
(``Proposed Order'') has been placed on the public record for 30 days 
for receipt of public comments from interested persons. Comments 
received during this period will become part of the public record. 
After 30 days, the Commission will again review the agreement, along 
with the comments received, and will decide whether it should make 
final the Proposed Order or withdraw from the agreement and take 
appropriate action.
    Respondent Mobilewalla is a Delaware company with its headquarters 
in Georgia. Founded in 2008, Mobilewalla is a data broker that 
aggregates consumer information, including location data, to use and 
sell for its clients' purposes, including marketing, analytics, and 
non-commercial uses.
    Mobilewalla does not collect information directly from consumers. 
Instead, Mobilewalla purchases consumers' location data and other 
personal information, including consumers' unhashed and hashed phone 
numbers from third-party data brokers. Mobilewalla has also collected 
data through real-time bidding (``RTB'') exchanges and other 
advertising platforms.
    When Mobilewalla bid to place an advertisement for its clients 
through an RTB exchange, Mobilewalla collected and retained the 
information contained in the bid request, including the device's mobile 
advertising identifier (``MAID''), a timestamp, and precise location 
data, if the consumer had location sharing turned on.
    Mobilewalla has sold or licensed raw consumer data, including a 
device's latitude and longitude coordinates paired with MAIDs, to its 
clients. Mobilewalla also analyzes the location data it obtains and, 
based on the locations and events visited by consumers' mobile devices, 
categorizes MAIDs into ``audience segments'' based on interests or 
characteristics purportedly revealed by the locations or events. 
Mobilewalla has offered standard audience segments such as ``Music 
Lovers'' but has also created custom audience segments for clients, 
such as audience segments targeting pregnant women, Hispanic 
churchgoers, and members of the LGBTQ+ community.
    Mobilewalla does not take sufficient steps to verify that consumers 
consent to its use of their data. Mobilewalla relies on its data 
suppliers to obtain consumer consent for the collection and use of 
their data. Mobilewalla's contracts with its data suppliers include 
vague provisions requiring the suppliers to comply with applicable law 
when transferring consumer data to Mobilewalla but does not 
specifically require consumer consent. In addition, Mobilewalla has 
minimal procedures to verify whether its suppliers obtained consumer 
consent. Mobilewalla typically evaluates new data suppliers through a 
questionnaire and by reviewing the disclosures to consumers from three 
to five apps from which the supplier collects consumers' data, even 
though some suppliers collect consumers' data from thousands of apps. 
Mobilewalla does not subsequently or periodically check whether the 
apps have changed their disclosures.
    In addition to failing to take sufficient steps to verify consumer 
consent,

[[Page 96998]]

Mobilewalla has retained the collected data indefinitely--far longer 
than necessary to accomplish the purpose of collection. This 
unreasonable retention period, combined with Mobilewalla's 
comprehensive data collection practices, significantly increases the 
risk that the sensitive location data would be disclosed or misused, 
causing harm to consumers.
    The Commission's proposed five-count complaint alleges that 
Mobilewalla violated section 5(a) of the FTC Act by (1) unfairly 
selling consumers' sensitive location information, (2) unfairly 
targeting consumers based on sensitive characteristics, (3) unfairly 
collecting consumers' information from RTB exchanges, (4) unfairly 
collecting and using consumer location information without consent 
verification, and (5) unfairly retaining consumer location information.
    With respect to the first count, the proposed complaint alleges 
that Mobilewalla sold consumers sensitive location information 
associated with unique persistent identifiers that reveal consumers' 
visits to sensitive locations. With respect to the second count, the 
proposed complaint alleges Mobilewalla has categorized consumers into 
audience segments based on sensitive characteristics, such as medical 
conditions and religious beliefs, derived from location data. 
Mobilewalla has sold or transferred these audience segments to third 
parties for marketing and other purposes, including identifying and 
targeting consumers who participate in political rallies and protests 
or attempting to identify and target consumers who participate in union 
organizing.
    With respect to the third count, the proposed complaint alleges 
that Mobilewalla collected consumers' personal information, including 
location data, from RTB exchanges, when Mobilewalla had no winning bid. 
With respect to the fourth count, the proposed complaint alleges that 
Mobilewalla failed to take reasonable steps to verify that consumers 
consent to Mobilewalla's use of their location data to track them, 
develop audience segments, target them with advertising, and use and 
share their location information with clients for commercial, 
political, law enforcement, and other purposes. Despite collecting data 
from thousands of apps, Mobilewalla only checked a very small number of 
apps to determine whether the app disclosed that the app collected 
location information and shared it with third parties. Mobilewalla also 
did not periodically check apps' disclosures, even though many apps 
change their disclosures over time.
    With respect to the fifth count, the proposed complaint alleges 
that Mobilewalla retained detailed, sensitive information about 
consumers, including their location data, indefinitely, which is longer 
than reasonably necessary to fulfill the purpose for which that 
information was collected. This practice caused substantial injury in 
the form of a loss of privacy about the day-to-day movements of 
millions of consumers, including through the use of retroactive 
geofences, and an increased risk of disclosure and use of such 
sensitive information.
    The proposed complaint alleges that Mobilewalla has caused or is 
likely to cause substantial injury in the form of loss of privacy about 
day-to-day movements of consumers and an increased risk of disclosure 
of such sensitive information. Additionally, with respect to the fourth 
count, the proposed complaint alleges that Mobilewalla has caused or is 
likely to cause substantial injury in the form of the chilling of 
consumers' First Amendment rights and an increased risk of public or 
harmful disclosure of sensitive information about consumers' private 
lives, including their fertility choices, religious worship, sexuality, 
and other such sensitive information.

Summary of Proposed Order With Respondent

    The Proposed Order contains injunctive relief designed to prevent 
Mobilewalla from engaging in the same or similar acts or practices in 
the future. Geolocation data can vary significantly in its precision. 
The privacy concerns posed by the proposed complaint relate to more 
precise location data--that is, location data that could be used to 
identify specific locations a consumer visits. As a result, the 
Proposed Order is limited to location data that identifies consumers' 
locations in a geographic area that is equal to or less than the area 
of a circle with a radius of 1,850 feet.
    Provision I prohibits Mobilewalla from misrepresenting (1) the 
extent to which it collects, maintains, uses, discloses, or deletes 
location data, and (2) the extent to which such data is deidentified. 
Provision II prohibits Mobilewalla from collecting or retaining 
consumer information that Mobilewalla accesses while participating in 
RTB exchanges for any other purpose than participating in the auctions 
that occur on the exchange.
    Provision III prohibits Mobilewalla from selling, licensing, 
transferring, sharing, disclosing, or using sensitive location data in 
any products or services.
    Sensitive locations are defined as those locations associated with 
(1) medical facilities (e.g., family planning centers, general medical 
and surgical hospitals, offices of physicians, offices of mental health 
physicians and practitioners, residential mental health and substance 
abuse facilities, outpatient mental health and substance abuse centers, 
outpatient care centers, psychiatric and substance abuse hospitals, and 
specialty hospitals); (2) religious organizations;( 3) correctional 
facilities; (4) labor union offices; (5) locations held out to the 
public as predominantly providing education or childcare services to 
minors; (6) locations held out to the public as predominantly providing 
services to LGBTQ+ individuals such as service organizations, bars and 
nightlife; (7) locations held out to the public as predominantly 
providing services based on racial or ethnic origin; or (8) locations 
held out to the public as predominantly providing temporary shelter or 
social services to homeless, survivors of domestic violence, refugees, 
or immigrants; (9) locations of public gatherings of individuals during 
political or social demonstrations, marches, and protests; or (10) 
military installations, offices, or buildings.
    Provision IV requires that Mobilewalla implement and maintain a 
sensitive location data program to develop a comprehensive list of 
sensitive locations and to prevent the use, sale, license, transfer, or 
disclosure of sensitive location data. Provision V prohibits 
Mobilewalla from selling or disclosing Location Data that may determine 
the identity or location of an individual's private residence.
    Provision VI requires Mobilewalla to implement a Supplier 
Assessment Program by which they assess their suppliers and help ensure 
that consumers have provided consent for the collection and use of 
Location Data obtained by Mobilewalla. Under this program, Mobilewalla 
must conduct initial assessments of all suppliers within 30 days of 
entering into a data sharing agreement. The program also requires that 
Mobilewalla confirm that consumers provide Affirmative Express Consent, 
if feasible, or confirm that consumers provide specific consent to the 
collection, use, and sale of their location data. Mobilewalla must also 
create and maintain records of its Suppliers' assessment responses. 
Finally, Mobilewalla must cease from using, selling, or disclosing 
location data for which consumers do not provide consent.

[[Page 96999]]

    Provision VII requires Mobilewalla to provide a clear and 
conspicuous means for consumers to request the identities of any third 
parties to whom Respondent sold or otherwise disclosed their location 
data during the one-year period preceding the request. Provision VIII 
requires Mobilewalla to provide a simple, easily-located means for 
consumers to withdraw any consent provided and Provision IX requires 
Mobilewalla to delete and cease collecting location data after 
Mobilewalla receives notice that the consumer has withdrawn their 
consent. Provision X also requires Mobilewalla to provide a simple, 
easily-located means for consumers to request that Mobilewalla delete 
location data that Mobilewalla previously collected and to delete the 
location data within 30 days of receipt of such request.
    Provision XI requires that Mobilewalla (1) document and adhere to a 
retention schedule for the covered information it collects from 
consumers, including the purposes for which it collects such 
information, the specific business needs, and an established timeframe 
for its deletion, and (2) prior to collecting or using new type of 
information related to consumers that was not previously collected, and 
is not described in its retention schedule, update its retention 
schedule. Provision XII requires Mobilewalla to delete any historic 
location data and consumers' unhashed and hashed phone numbers in their 
control and any work product created from this data and to instruct 
their customers to also delete this information, unless Mobilewalla 
contains a record in accordance with the Supplier Assessment Program 
(Provision VI) that consumers consented to the collection, use, and 
disclosure of their historic location data or the historic location 
data is deidentified or rendered non-sensitive. Provision XIII requires 
Mobilewalla to establish and implement, and thereafter maintain, a 
comprehensive privacy program that protects the privacy of consumers' 
personal information.
    Provisions XIV-XVII are reporting and compliance provisions, which 
include recordkeeping requirements and provisions requiring Mobilewalla 
to provide information or documents necessary for the Commission to 
monitor compliance. Provision XVIII states that the Proposed Order will 
remain in effect for 20 years, with certain exceptions.
    The purpose of this analysis is to facilitate public comment on the 
Proposed Order, and it is not intended to constitute an official 
interpretation of the complaint or Proposed Order, or to modify the 
Proposed Order's terms in any way.

    By direction of the Commission, Commissioner Holyoak dissenting.
April J. Tabor,
Secretary.

Statement of Chair Lina M. Khan Joined by Commissioner Alvaro M. Bedoya

    Last year a new report revealed the relative ease with which 
foreign adversaries can gather sensitive data on Americans.\1\ Foreign 
states could identify, for example, whether someone has a substance 
abuse problem, a gambling addiction, or major financial problems--a 
``torrent of blackmail data'' ripe for abuse.\2\ The report noted that 
people susceptible to this type of surveillance include active military 
personnel, defense officials, lawmakers, and judges. Beyond government 
employees, hundreds of millions of Americans are at risk. Precise 
location data, for example, can be harnessed by managers tracking 
employees suspected of workplace organizing, law enforcers monitoring 
protestors who oppose government policies, or stalkers keeping tabs on 
their victims.
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    \1\ Irish Council for Civil Liberties, America's Hidden Security 
Crisis: How Data About United States Defence Personnel & Political 
Leaders Flows to Foreign States & Non-State Actors (2023), https://www.iccl.ie/wp-content/uploads/2023/11/Americas-hidden-security-crisis.pdf. See also Justin Sherman, et al., Data Brokers and the 
Sale of Data on U.S. Military Personnel Risks to Privacy, Safety, 
and National Security (Duke Univ. Sanford Sch. of Pub. Pol'y 2023), 
https://techpolicy.sanford.duke.edu/data-brokers-and-the-sale-of-data-on-us-military-personnel/; Joseph Cox, The Hundreds of Little-
Known Firms Getting Data on Americans, Vice (June 28, 2021), https://www.vice.com/en/article/hundreds-companies-bidstream-data-location-browsing/.
    \2\ Id.
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    The mechanism for this surveillance is shockingly commonplace: 
``real-time bidding'' (RTB) exchanges, an advertising technology 
present on a huge swath of websites and apps. RTB exchanges host the 
online auctions that determine which advertisement gets served to a 
specific individual on a specific website or app. Because these ads are 
targeted, RTB technology captures reams of personal data, such as a 
person's browsing history and their location and movements over time--
and then broadcasts this sensitive data to anyone seeking to bid on the 
ad slot. One report estimates that RTB technologies track and broadcast 
what every U.S. internet user does every 30 seconds they are online--or 
747 times a day on average.\3\ Strikingly, a firm can capture and 
retain individuals' web browsing data, location data, and other 
sensitive details even when it does not serve any ads to them. As 
lawmakers have noted, the exposure of this bidstream data creates an 
``outrageous privacy violation'' \4\ as well as a major threat to 
national security.\5\
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    \3\ Id. at p. 7.
    \4\ Letter from Sen. Wyden to Chair Simons (July 30, 2020), 
https://www.wyden.senate.gov/imo/media/doc/073120_Wyden_Cassidy_Led_FTC_Investigation_letter.pdf.
    \5\ Joseph Cox, Congress Says Foreign Intel Services Could Abuse 
Ad Networks for Spying, Vice (Apr. 6, 2021), https://www.vice.com/en/article/congress-foreign-intelligence-agencies-bidstream-real-time-bidding/.
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    Today the FTC is bringing an enforcement action against 
surveillance practices that illegally harness RTB data--the first time 
the Commission has taken action against the use of this ``bidstream'' 
data. Specifically, our action against Mobilewalla charges that the 
data broker, among other things, unfairly collected people's sensitive 
data (including precise location) from real-time bidding exchanges--
even when it did not place an ad through the bid.
    This conduct was part of a broader set of practices that 
Mobilewalla undertook to unlawfully collect, sell, and retain sensitive 
information on millions of Americans. Our investigation uncovered that 
Mobilewalla gathered large swaths of people's personal information, 
including location data, and sold ``audience segments'' that third 
parties could use to target people based on sensitive characteristics. 
Mobilewalla's audience segments included, for example, Hispanic 
churchgoers, pregnant women, members of the LGBTQ+ community, workers 
participating in union organizing, and people who participate in 
political rallies. Mobilewalla built these profiles through a variety 
of mechanisms beyond its use of bidstream data, such as by creating 
``geo-fences'' around places like pregnancy centers, political 
protests, and state capitols.\6\ Mobilewalla even began collecting 
people's phone numbers, which, paired with MAIDs, could be used to 
identify the person frequenting a specific location.
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    \6\ In one instance, one of Mobilewalla's clients used its data 
to ``geo-fence the homes of individuals relevant to a private 
lawsuit and track where those individuals had traveled to over the 
preceding two years, including whether they visited federal law 
enforcement offices.'' Complaint, In re Mobilewalla, Inc., FTC File 
No. 2023196 (Dec. 3, 2024) at ] 50.
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    The Commission's complaint charges that Mobilewalla's practices 
constituted unfair conduct in violation of the FTC Act. Specifically, 
the complaint alleges that: (1) Mobilewalla's sale of people's 
sensitive location data is unfair; (2) Mobilewalla's sale and transfer 
of audience segments based on sensitive characteristics--like their 
medical conditions, religious beliefs,

[[Page 97000]]

participation in workplace organizing, or attendance at political 
protests--is unfair; (3) Mobilewalla's collection of people's personal 
information, including geolocation data, from RTB exchanges even when 
Mobilewalla had no winning bid is unfair; (4) Mobilewalla's failure to 
take reasonable steps to verify that users consent to its use of their 
location data to surveil them, develop audience segments based on 
sensitive characteristics, target them with advertising, and 
disseminate their location data with a host of clients is unfair, and 
(5) Mobilewalla's indefinite retention of people's sensitive location 
information is unfair.
    The Commission's action against Mobilewalla marks the FTC's fifth 
case involving the illegal dissemination of geolocation information--
all pursued in the last 28 months.\7\ This steady clip of cases 
reflects our recognition that location data is among the most sensitive 
of people's data, revealing everything from where someone spends the 
night to what medical services they seek. Indeed, the District of Idaho 
last year recognized that invasions of privacy can substantially injure 
Americans, even without a showing of further harm.\8\ And noting that 
``location records hold for many Americans the `privacies of life,' '' 
the Supreme Court has held that constitutional safeguards against 
unchecked government surveillance extend to digital location tracking--
even when the data is originally collected by private companies.\9\
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    \7\ Press Release, Fed. Trade Comm'n, FTC Sues Kochava for 
Selling Data that Tracks People at Reproductive Health Clinics, 
Places of Worship, and Other Sensitive Locations (Aug. 29, 2022), 
https://www.ftc.gov/news-events/news/press-releases/2022/08/ftc-sues-kochava-selling-data-tracks-people-reproductive-health-clinics-places-worship-other; Press Release, Fed. Trade Comm'n, FTC Order 
Prohibits Data Broker X-Mode Social and Outlogic from Selling 
Sensitive Location Data (Jan. 9, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-order-prohibits-data-broker-x-mode-social-outlogic-selling-sensitive-location-data; Press 
Release, Fed. Trade Comm'n, FTC Order Will Ban InMarket from Selling 
Precise Consumer Location Data (Jan. 18, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-order-will-ban-inmarket-selling-precise-consumer-location-data; Press Release, Fed. Trade 
Comm'n, Gravy Analytics (Dec. 3, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/12/ftc-takes-action-against-gravy-analytics-venntel-unlawfully-selling-location-data-tracking-consumers.
    \8\ Memorandum Decision & Order, FTC v. Kochava Inc., 2:22-cv-
00377-BLW (D. Idaho May 4, 2023) (``Thus, under the plain language 
of the FTC Act, a defendant whose acts or practices violate consumer 
privacy may be said to inflict an `injury' upon consumers within the 
meaning of Section 5(n)'').
    \9\ Carpenter v. United States, 585 U.S. 296, 138 S. Ct. 2206, 
2217 (2018) (quoting Riley v. California, 573 U.S. 373, 403 (2014)). 
See also Statement of Chair Lina M. Khan Joined by Comm'r Rebecca 
Kelly Slaughter and Comm'r Alvaro Bedoya In the Matter of X-Mode 
Social, Inc. and Outlogic, LLC (Jan. 9, 2024), https://www.ftc.gov/legal-library/browse/cases-proceedings/public-statements/statement-chair-lina-m-khan-joined-commissioner-rebecca-kelly-slaughter-commissioner-alvaro-bedoya-0; Statement of Comm'r Alvaro Bedoya 
Joined By Chair Lina M. Khan In the Matter of Gravy Analytics (Dec. 
3, 2024), https://www.ftc.gov/legal-library/browse/cases-proceedings/public-statements/statement-commissioner-alvaro-m-bedoya-joined-chair-lina-m-khan-commissioner-rebecca-kelly-slaughter-3.
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    Today's action highlights two areas meriting continued focus for 
the Commission and policymakers concerned about threats to Americans' 
privacy. First, the ease with which real-time bidding technology can be 
exploited to surveil Americans should raise serious alarm. No real 
safeguards limit who can access, harness, or retain this data, meaning 
that the multi-billion-dollar industry built around targeted 
advertising leaves Americans' sensitive data shockingly exposed.
    Second, this matter further highlights the continued shortcomings 
of the ``notice and consent'' paradigm. Most people never interact with 
Mobilewalla and have no idea that Mobilewalla amasses data detailing 
their precise location and movements. In theory, Mobilewalla would rely 
on its data suppliers to obtain consumer consent for the collection and 
use of their data. But in practice, Mobilewalla has minimal procedures 
to verify whether its suppliers actually obtained consumer consent--and 
many disclosures are broad enough to render consent effectively 
meaningless. In recent years, the Commission's orders have moved away 
from remedies and relief premised exclusively on consumer consent--and 
included greater reliance on presumptive bans and prohibitions.\10\ 
Continuing to ensure our orders reflect the realities of how people 
engage in today's economy will be critical for Americans to enjoy real 
privacy.
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    \10\ See, e.g., X-Mode, InMarket, supra note 7; Press Release, 
Fed. Trade Comm'n, FTC Order Will Ban Avast from Selling Browsing 
Data for Advertising Purposes, Require It to Pay $16.5 Million Over 
Charges the Firm Sold Browsing Data After Claiming Its Products 
Would Block Online Tracking (Feb. 22, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-order-will-ban-avast-selling-browsing-data-advertising-purposes-require-it-pay-165-million-over; Press Release, Fed. Trade Comm'n, FTC Enforcement 
Action to Bar GoodRx from Sharing Consumers' Sensitive Health Info 
for Advertising (Feb. 1, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/02/ftc-enforcement-action-bar-goodrx-sharing-consumers-sensitive-health-info-advertising.
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    I am grateful to the DPIP team for their excellent work on this 
matter.

Concurring and Dissenting Statement of Commissioner Andrew N. Ferguson

    Today the Commission approves complaints against, and proposed 
consent orders with, Gravy Analytics \1\ (``Gravy'') \2\ and 
Mobilewalla \3\ for various practices concerning the collection and 
dissemination of precise location data allegedly constituting unfair or 
deceptive acts or practices in violation of section 5 of the Federal 
Trade Commission Act.\4\ Gravy and Mobilewalla are data brokers that 
aggregate and sell consumer data, including location data.\5\ Gravy and 
Mobilewalla do not collect the data from consumers.\6\ Those data are 
collected from applications that consumers use on their smartphones, 
and Gravy and Mobilewalla purchase or otherwise acquire those data 
after they are collected.\7\ Gravy and Mobilewalla then sell those data 
to private firms for advertising, analytics, and other purposes, as 
well as to the government.\8\
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    \1\ Also named is Venntel, Inc., a wholly-owned subsidiary of 
Gravy Analytics.
    \2\ Complaint, In re Gravy Analytics (``Gravy Complaint'').
    \3\ Complaint, In re Mobilewalla (``Mobilewalla Complaint'').
    \4\ 15 U.S.C. 45.
    \5\ Gravy Complaint ] 7; Mobilewalla Complaint ]] 3, 18.
    \6\ Gravy Complaint ] 8; Mobilewalla Complaint ] 4.
    \7\ Gravy Complaint ]] 9-10; Mobilewalla Complaint ]] 4, 5.
    \8\ Gravy Complaint ]] 13-21; Mobilewalla Complaint ]] 6, 19, 
36. As my colleagues' statements make clear, the sale of data to the 
government for law-enforcement, national-security, and immigration-
enforcement purposes implicates different constitutional and 
statutory questions than the sale of those same data to private 
firms. I take no firm position on those questions except to say that 
I believe that the restrictions on sale to the government in the 
Gravy order are lawful.
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Part I

    I concur entirely in two of the counts the Commission brings 
against both firms, and one that we bring against Mobilewalla alone. 
These counts are sufficient to justify my vote in favor of submitting 
the complaints and proposed consent orders for public comment. First, 
the Commission alleges that Gravy and Mobilewalla sell consumers' 
precise location data without taking sufficient measures to anonymize 
the information or filter out sensitive locations.\9\ This type of 
data--records of a person's precise physical locations--is inherently 
intrusive and revealing of people's most private affairs. The sale of 
such revealing information that can be linked directly to an individual 
consumer poses an obvious risk of

[[Page 97001]]

substantial injury to that consumer.\10\ The theft or accidental 
dissemination of those data would be catastrophic to the consumer. The 
consumer cannot avoid the injury. Unless the consumer has consented to 
the sale of intimate data linked directly to him, the sale of the data 
happens entirely without his knowledge.\11\ Finally, given that the 
anonymized data remain valuable to firms for advertising and analytics, 
the injury that the consumer suffers is not outweighed by any 
countervailing benefits for the consumer.\12\ The sale of non-
anonymized, precise location data without first obtaining the 
meaningfully informed consent of the consumer is therefore an unfair 
act or practice in violation of section 5.
---------------------------------------------------------------------------

    \9\ Gravy Complaint ]] 73-75; Mobilewalla Complaint ]] 66-67.
    \10\ 15 U.S.C. 45(n); see FTC v. Kochava, Inc., 715 F. Supp. 3d 
1319, 1323-24 (D. Idaho 2024).
    \11\ 15 U.S.C. 45(n).
    \12\ Ibid.
---------------------------------------------------------------------------

    Second, the Commission accuses both companies of collecting, using, 
and selling precise location information without sufficiently verifying 
that the consumers who generated the data consented to the collection 
of those data by the applications that collected it.\13\ Given that the 
failure to obtain meaningful consent to the collection of precise 
location data is widespread, data brokers that purchase sensitive 
information cannot avoid liability by turning a blind eye to the strong 
possibility that consumers did not consent to its collection and sale. 
The sale of precise location data collected without the consumer's 
consent poses a similarly unavoidable and substantial risk of injury to 
the consumer as does the sale of the non-anonymized data. I therefore 
concur in these counts against Gravy and Mobilewalla.\14\
---------------------------------------------------------------------------

    \13\ Gravy Complaint ]] 76-78; Mobilewalla Complaint ]] 71-72.
    \14\ Section 5 does not impose strict liability for the purchase 
of precise location data collected without the consumer's consent, 
nor do I understand the complaints and orders as interpreting 
section 5 hold data brokers strictly liable for every purchase of 
precise location data that was collected without the consumer's 
consent. Data brokers need only take reasonable steps to ensure that 
the data they are acquiring were originally collected with the 
consumer's consent. Gravy Complaint ] 76 (faulting Gravy for not 
taking ``reasonable steps to verify that consumers provide informed 
consent to Respondents' collection, use, or sale of the data for 
commercial and government purposes.''); Mobilewalla Complaint ] 71 
(similar).
---------------------------------------------------------------------------

    I further concur in one additional count charged against 
Mobilewalla alone. The Commission accuses it of having committed an 
unfair act or practice for its conduct on real-time bidding exchanges 
(RTBs).\15\ An RTB is a marketplace where advertisers bid in real time 
on the opportunity to show an advertisement to a user as the user is 
visiting a website or using an application.\16\ The auctions take place 
in the blink of an eye, and the listings on which advertisers bid 
include information such as the user's mobile advertising ID (MAIDs) 
and current precise location.\17\ Advertisers crave these data because 
it allows them to maximize the value of each ad impression by 
displaying the ads only to the users most likely to find the 
advertisement useful. The Commission accuses Mobilewalla of sitting on 
the RTBs, submitting bids, collecting the MAIDs and location data for 
the bids, retaining those data even when it did not win the auction, 
and combining those data with data acquired from other sources to 
identify the user represented by the MAID.\18\ It aggregated and sold 
this combined identity and location information to its clients.\19\ 
This alleged practice violated Mobilewalla's legal contracts with the 
exchanges.\20\
---------------------------------------------------------------------------

    \15\ Mobilewalla Complaint ] 70.
    \16\ Id. ] 9.
    \17\ Ibid.
    \18\ Id. ]] 12-15.
    \19\ Id. ] 18.
    \20\ Mobilewalla Complaint ] 10.
---------------------------------------------------------------------------

    The violation of a private contract alone is not enough to 
establish a violation of section 5.\21\ But these agreements protected 
more than just Mobilewalla's contractual counterparties. They also 
protected large numbers of consumers from the risk of having their 
private data aggregated, linked to their identity, and sold without 
their consent, as Mobilewalla did. Mobilewalla's breach of its 
contractual obligations therefore exposed consumers to the same 
substantial risk of injury as collection of their data without consent, 
was not reasonably avoidable by consumers (as this conduct was far 
removed from their knowledge and control), and was not outweighed by 
any countervailing benefits to consumers. It is therefore in the public 
interest to hold Mobilewalla liable for this conduct under section 5, 
as it would be even if no contract governed Mobilewalla's obligations 
regarding the unconsented collection and retention of these precise 
location data.\22\
---------------------------------------------------------------------------

    \21\ See FTC v. Klesner, 280 U.S. 19, 28 (1929) (Section 5's 
requirement that enforcement ``would be to the interest of the 
public'' is not satisfied in the case of a purely private dispute, 
as ``the mere fact that it is to the interest of the community that 
private rights shall be respected is not enough to support a finding 
of public interest.'').
    \22\ See id. at 27-28 (explaining that protection of private 
rights can be incident to the public interest, and that such cases 
might include those where the conduct threatens the existence of 
competition, involves the ``flagrant oppression of the weak by the 
strong,'' or where the aggregate loss is sufficient to make the 
matter one of public consequence but incapable of vindication by 
individual private suits).
---------------------------------------------------------------------------

Part II

    I dissent from the Commission's counts against both firms accusing 
them of unfairly categorizing consumers based on sensitive 
characteristics, and of selling those categorizations to third 
parties.\23\ The FTC Act prohibits the collection and subsequent sale 
of precise location data for which the consumer has not consented to 
the collection or sale. It further requires data brokers to take 
reasonable steps to ensure that consumers originally consented to the 
collection of the data that the data brokers subsequently use and sell. 
If a company aggregates and categorizes data that were collected 
without the consumer's consent, and subsequently sells those 
categorizations, it violates section 5. But it does so only because the 
data were collected without consent for such use, not because the 
categories into which it divided the data might be on an indeterminate 
naughty categories list. The FTC Act imposes consent requirements in 
certain circumstances. It does not limit how someone who lawfully 
acquired those data might choose to analyze those data, or the 
conclusions that one might draw from them.\24\
---------------------------------------------------------------------------

    \23\ Gravy Complaint ]] 79-81; Mobilewalla Complaint ]] 68-69.
    \24\ Of course, other laws might prohibit particular uses of 
data that were collected consistently with the requirements of 
section 5. Using lawfully obtained data to draw conclusions about a 
consumer's race alone would not violate section 5, but using those 
conclusions to make an employment or housing decision, for example, 
might violate the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., 
or the Fair Housing Act, 42 U.S.C. 3601 et seq. But merely drawing a 
conclusion from lawfully obtained data does not violate section 5.
---------------------------------------------------------------------------

    Consider an analogous context: the collection of data by private 
investigators. Private investigators do not violate the law if they 
follow someone on the public streets to his place of employment, 
observe him entering a church, observe him attending the meeting of a 
political party, or watch him enter a hospital. These are all public 
acts that people carry out in the sight of their fellow citizens every 
day. Nor do private investigators violate the law by concluding from 
their lawful observations that the person works for that company, 
practices that religion, belongs to that political party, or suffers 
from an illness. Nor would the law prohibit the private investigator 
from selling his conclusions to a client. But the law would forbid 
private investigators from trespassing on the employer's property; from 
surreptitiously planting cameras inside

[[Page 97002]]

the church sanctuary to observe the rites; from recording the 
proceedings of the political meeting without consent; or from extorting 
hospital staff for information about the person's condition. The law 
prohibits collecting data in unlawful ways; it does not prohibit 
drawing whatever conclusions one wants, or selling those conclusions to 
someone else, so long as the data from which the conclusions were drawn 
were lawfully obtained.
    The same principle should apply to section 5. The added wrinkle is 
that in the information economy, private data are usually collected in 
the context of a commercial relationship between the user and the 
developer of an application or website. Just as we expect a merchant to 
disclose the material terms of a transaction before collecting payment, 
we expect that the user of an app or website be informed of how their 
private information--part, and often all, of the consideration they 
give in exchange for use of the app or website--will be collected and 
used, and given a chance to decline the transaction. Commercial 
fairness might also require more than vague hidden disclosures, 
especially when the loss of privacy is substantial, as is the case with 
collection of precise location data and its sale to third parties.
    Rather than faulting these companies for disclosing data about 
users without adequate consent, these counts in the complaints focus 
instead on the inherent impropriety of categorizing users according to 
so-called ``sensitive characteristics.'' Perhaps my colleagues are 
worried that advertisements targeted on the basis of these categories 
can cause emotional distress--the theory they advanced in the 
Commission's Social Media 6(b) Report earlier this year.\25\ But as I 
argued then, it is folly to try to identify which characteristics are 
sensitive and which are not. ``[T]he list of things that can trigger 
each unique individual's trauma is endless and would cover every 
imaginable'' advertisement based on every possible categorization, so 
whatever lines we end up drawing will be ``either arbitrary or highly 
politicized.'' \26\
---------------------------------------------------------------------------

    \25\ FTC, A Look Behind the Screens: Examining the Data 
Practices of Social Media and Video Streaming Services, An FTC Staff 
Report, at 44 (Sept. 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/Social-Media-6b-Report-9-11-2024.pdf.
    \26\ Concurring and Dissenting Statement of Commissioner Andrew 
N. Ferguson, A Look Behind the Screens: Examining the Data Practices 
of Social Media and Video Streaming Services, at 5 (Sept. 19, 2024), 
https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-statement-social-media-6b.pdf.
---------------------------------------------------------------------------

    We can already see this dysfunction in these complaints, which 
mention as sensitive characteristics race, ethnicity, gender, gender 
identity, sexual orientation, pregnancy, parenthood, health conditions, 
religion, and attendance of a political protest, among others.\27\ 
While some of these characteristics often entail private facts, others 
are not usually considered private information. Attending a political 
protest, for example, is a public act. The public expression of 
dissatisfaction or support is the point of a protest. Treating 
attendance at a political protest as uniquely private and sensitive is 
an oxymoron. Moreover, there are no objective criteria on which to base 
this list.\28\ The statute provides no guidance. The list is therefore 
a purely subjective creation of Commission bureaucrats. And it excludes 
categories that many would consider deeply private and sensitive.\29\ 
And if we did a full accounting of characteristics that someone, 
somewhere might consider sensitive, no useful categorizations would 
remain. If what we are worried about is that the generation and sale of 
these categorizations will be a substitute for the sale of the user 
data from which they are derived, the correct approach is to treat 
conclusions derived from user data as no different than the underlying 
data. In either case, adequate consent is required for their 
collection, use, and sale.
---------------------------------------------------------------------------

    \27\ Mobilewalla Complaint ]] 27-32.
    \28\ See Kyllo v. United States, 533 U.S. 27, 38-39 (2001) 
(rejecting a Fourth Amendment rule that limited thermal-imaging data 
collection to only ``intimate details'' because of the impossibility 
of developing a principled distinction between intimate and 
nonimtimate information).
    \29\ Gun ownership is an example. In many States, citizens are 
free to own guns without registering them. There is therefore no 
public record that a person owns a gun. And in constitutional-carry 
States, a citizen may carry his handgun in concealment without the 
government's permission, which means that bearing a firearm outside 
the home remains a private act. I expect many Americans would be 
horrified if their sensitive location data were used to place them 
in a ``gun owner'' category, and that category were then sold to 
other firms or to the government--particularly banks have gotten in 
the habit of ejecting customers who engaged in disfavored 
activities. Yet gun ownership does not make the Commission's list. 
But political protests do. It is hard to see this list as anything 
other than the product of arbitrary or political decision making.
---------------------------------------------------------------------------

    Finally, I have doubts about the viability of a final charge levied 
against Mobilewalla for indefinitely retaining consumer location 
information.\30\ It is a truism that data stored indefinitely is at a 
greater risk of compromise than data stored for a short period of time. 
But nothing in section 5 forms the basis of standards for data 
retention. The difficulty is illustrated perfectly by the proposed 
order we approve today. Rather than impose any particular retention 
schedule, it merely requires that Mobilewalla:
---------------------------------------------------------------------------

    \30\ Mobilewalla Complaint ]] 73-74.

. . . document, adhere to, and make publicly available . . . a 
retention schedule . . . setting forth: (1) the purpose or purposes 
for which each type of Covered Information is collected or used; (2) 
the specific business needs for retaining each type of Covered 
Information; and (3) an established timeframe for deletion of each 
type of Covered Information limited to the time reasonably necessary 
to fulfill the purpose for which the Covered Information was 
collected, and in no instance providing for the indefinite retention 
of any Covered Information . . .\31\
---------------------------------------------------------------------------

    \31\ Decision and Order, In re Mobilewalla, Inc., at 13.

    Given that Mobilewalla is in the business of selling user 
information, and that the marginal cost of data storage is low, the 
``specific business need'' can be nothing more than the possible 
existence in the future of some buyer willing to pay more than the low 
cost of storage to acquire the data. I see no reason why Mobilewalla 
could not set a retention period of many decades based on this 
reasoning. In fact, while two-year-old location data is intuitively 
less valuable than one-year-old location data, it is quite plausible 
that twenty- or thirty-year-old location data is more valuable than 
location data that is only a few years old, as it may allow advertisers 
to tap into nostalgic sentiments.
    The trouble with both the sensitive-categories count and the data-
retention count is that the text of section 5 cannot bear the 
tremendous weight my colleagues place on it. My colleagues want the FTC 
Act to be a comprehensive privacy law. But it is not. Comprehensive 
privacy regulation involves difficult choices and expensive tradeoffs. 
Congress alone can make those choices and tradeoffs. It did not do so 
when it adopted the general prohibitions of section 5 nearly nine 
decades ago. And it has not adopted comprehensive privacy legislation 
since then. We must respect that choice.
    Until Congress acts, we should vigorously protect Americans' 
privacy by enforcing the laws Congress has actually passed. But we must 
not stray from the bounds of the law. If we do, we will sow uncertainty 
among legitimate businesses, potentially disrupt the ongoing 
negotiations in Congress on privacy legislation, and risk damaging 
losses for the Commission in court.

Dissenting Statement of Commissioner Melissa Holyoak

    Since arriving at the Commission, I have supported law enforcement 
actions against data brokers that sold precise

[[Page 97003]]

geolocation data revealing consumers' religious beliefs, political 
leanings, and medical conditions.\1\ Such enforcement actions have been 
particularly important where they help preserve Americans' freedoms and 
are consistent with the FTC Act, such as in a separate case the 
Commission brings against Gravy Analytics today. But the instant 
complaint and proposed settlement with Mobilewalla colors well outside 
the lines of the Commission's authority. Indeed, the Chair is seeking 
to effectuate legislative and policy goals that rest on novel legal 
theories well beyond what Congress has authorized. We should not use 
our enforcement powers this way.\2\ Because core aspects of this case 
are misguided, I dissent. I briefly explain some of my concerns below. 
And I anticipate and welcome robust comment on the proposed order 
before it is finalized.
---------------------------------------------------------------------------

    \1\ See, e.g., Concurring Statement of Comm'r Melissa Holyoak, 
Kochava, Inc., FTC Matter No. X230009 (July 15, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/2024-7-15-Commissioner-Holyoak-Statement-re-Kochava-final.pdf; Concurring Statement of Comm'r 
Melissa Holyoak, Joined In Part By Comm'r Alvaro M. Bedoya (Section 
I Only), In re Gravy Analytics, Inc., FTC Matter No. 2123035 (Dec. 
3, 2024).
    \2\ Cf., e.g., Dissenting Statement of Comm'r Melissa Holyoak, 
Joined by Comm'r Andrew N. Ferguson, In re Rytr, LLC, FTC Matter No. 
2323052, at 1 (Sept. 25, 2024) (``As I have suggested recently in 
other contexts, the Commission should steer clear of using 
settlements to advance claims or obtain orders that a court is 
highly unlikely to credit or grant in litigation. Outside that 
crucible, the Commission may more readily advance questionable or 
misguided theories or cases. Nevertheless, private parties track 
such settlements and, fearing future enforcement, may alter how they 
act due to a complaint's statement of the alleged facts, its 
articulation of the law, or how a settlement order constrains a 
defendant's conduct. In all industries, but especially evolving ones 
. . . misguided enforcement can harm consumers by stifling 
innovation and competition. I fear that will happen after today's 
case, which is another effort by the Majority to misapply the 
Commission's unfairness authority under section 5 beyond what the 
text authorizes. Relatedly, I believe the scope of today's 
settlement is unwarranted based on the facts of this case.'' 
(citations omitted)), https://www.ftc.gov/system/files/ftc_gov/pdf/holyoak-rytr-statement.pdf.
---------------------------------------------------------------------------

    Several background considerations also inform my approach and 
dissent in this particular matter. First, this matter uses a settlement 
to effectuate policy objectives that political leadership at the 
Commission has sought for years but failed to achieve through 
regulation.\3\ No matter how much political pressure Chair Khan and the 
Bureau Director may feel with the shot-clock running out, the 
Commission should not use complaints and orders to score political 
points that stem from misuse of our statutory authorities. Second and 
related: Chair Khan's decision to proceed runs directly afoul of recent 
Congressional oversight from several of the FTC's authorizing 
Committees that explicitly cautioned against this type of endeavor.\4\ 
Choosing to proceed undermines our institutional legitimacy and will 
engender even more distrust from Congress--trust that current 
leadership at the Commission has repeatedly broken.\5\
---------------------------------------------------------------------------

    \3\ See Press Release, FTC Explores Rules Cracking Down on 
Commercial Surveillance and Lax Data Security Practices (Aug. 11, 
2022), https://www.ftc.gov/news-events/news/press-releases/2022/08/ftc-explores-rules-cracking-down-commercial-surveillance-lax-data-security-practices.
    \4\ See, e.g., Letter from Senator Ted Cruz, Ranking Member, 
Committee on Commerce, Science, and Transportation, to Lina Khan, 
Chairwoman, Fed. Trade Comm'n (Nov. 7, 2024) (cautioning that the 
FTC should ``focus only on matters that are uncontroversial and 
would be approved unanimously by all Commissioners''); Letter from 
Representative Jim Jordan, Chairman, Committee on the Judiciary, to 
Lina Khan, Chair, Fed. Trade Comm'n, at 1 (Nov. 14, 2024) (the ``FTC 
should also cease all partisan activity''); Letter from 
Representative Cathy McMorris Rodgers, Chair, Committee on Energy 
and Commerce, to Lina Khan, Chair, Fed. Trade Comm'n (Nov. 6, 2024) 
(``As a traditional part of the peaceful transfer of power, the FTC 
should immediately stop work on any partisan or controversial item 
under consideration . . . .'').
    \5\ Accordingly, this case illustrates how leadership at the 
Commission has vocally claimed to be acting on consumers' behalf 
over the past several years, but then--where it has effectively 
usurped the legislative branch--has actually harmed the Commission's 
legitimacy and long-term ability to serve the American people.
---------------------------------------------------------------------------

    With that larger context in mind, I will briefly describe some of 
my concerns on the merits. According to the Complaint, Mobilewalla has 
relied primarily on information it collected from real-time bidding 
exchanges (RTB exchanges) to build its portfolio of consumers' 
geolocation data.\6\ These exchanges facilitate advertisers' bids to 
place content in front of specific consumers, whose information has 
been sent to the exchange to enable the bidding.\7\ Mobilewalla would 
retain information collected from RTB exchanges, including a consumer's 
``precise geolocation information, if the consumer had location sharing 
turned on,'' even if the bid were unsuccessful.\8\
---------------------------------------------------------------------------

    \6\ See Compl. ]] 9-10.
    \7\ Id.
    \8\ Id. ]] 10, 33.
---------------------------------------------------------------------------

    The Majority erroneously declares Mobilewalla's collection of 
consumer information from the RTB exchanges is unfair. Specifically, 
the Complaint alleges that the practice of collecting data was unfair 
in part because it caused or is likely to cause substantial injury.\9\ 
But the Complaint's allegations are remarkably sparse when it comes to 
establishing how the collection itself caused substantial injury, and 
its related allegations do not otherwise satisfy what section 5 
requires for unfairness.\10\ For the Majority, the mere collection of 
data implausibly ``causes or is likely to cause'' substantial injury 
and lacks countervailing benefits that section 5's cost-benefit 
analysis requires assessing.\11\ Such a theory of unfairness--
assertions about a particular practice without facts alleged reflecting 
causation of injury to consumers--is contrary to black-letter 
unfairness law. Of course, none of these observations about the limits 
of our unfairness authority mean Mobilewalla had clean hands under 
contract law, where Mobilewalla's agreements with RTB exchanges barred 
collection and retention of consumer data for unsuccessful bids.\12\ 
But--contrary to what those keeping score may conclude from this case 
and settlement--a business-to-business breach of contract that may have 
potential effects on consumers does not automatically give rise to an 
unfairness claim under section 5.\13\
---------------------------------------------------------------------------

    \9\ See id. ]] 70-71. The factual predicate appears to be that 
if the data had never been collected in the first place, consumers 
could never have been harmed later through its alleged misuse.
    \10\ See id. ]] 7-16, 33-37.
    \11\ See 15 U.S.C. 45(n).
    \12\ Compl. ] 10.
    \13\ Accordingly, the Commission should not seek to use a novel 
section 5 theory to support what looks like a remedy for breach of 
contract, as it does in Provision II of the Order. See Provision II 
(``Prohibition on Collection and Retention of Covered Information 
from Advertising Auctions'').
---------------------------------------------------------------------------

    Count II, for ``Unfair Targeting Based on Sensitive 
Characteristics,'' is also misguided. The practice this Count alleges 
is unfair is the ``categorization of consumers based on sensitive 
characteristics derived from location information.'' \14\ But there is 
nothing intrinsically unfair about such categorization, on its own. 
Instead, each unfairness claim needs to be assessed in a granular way 
for both substantial injury and countervailing benefits.\15\ For 
example, and contrary to any lop-sided framing of harms concerning 
abortion:\16\

[[Page 97004]]

a mother considering her pregnancy may experience significant benefits 
if data analysis and categorization mean she ultimately receives 
tailored advertisements from crisis pregnancy centers offering prenatal 
and postnatal care for her and her child.\17\ And a significant benefit 
would accrue to the unborn child: her survival.\18\ Put simply, 
categorization does not automatically violate section 5. But today's 
case sends the opposite message.\19\
---------------------------------------------------------------------------

    \14\ Compl. ] 69 (emphasis added).
    \15\ See, e.g., Concurring Statement, In re Gravy Analytics, 
supra note 1, at 6 (``We should not conflate our concern about 
deceptive advertising (the bogus treatment) with the lawful act of 
categorizing and targeting based on sensitive data, lest we 
undermine the ability to connect women with life-saving care.'' 
(emphasis added)). To the extent there is harm here, it could of 
course stem from wrongful disclosure of certain information in 
certain circumstances--for example, disclosure of location to 
government agencies circumventing Fourth Amendment protections. But 
the mere categorization of consumers does not necessarily violate 
section 5, and it may have significant countervailing benefits.
    \16\ Cf. Compl. ]] 56-57; see also Compl., In re Gravy 
Analytics, ]] 67-68 (similar allegations); Compl., Fed. Trade Comm'n 
v. Kochava, Inc., 2:22-cv-00377, ]] 107-08 (D. Idaho, July 15, 
2024), ECF No. 86 (similar allegations).
    \17\ See Concurring Statement, In re Gravy Analytics, supra note 
1, at 6 (``We also need to disentangle any objections to the content 
of an advertisement from the practices of categorization and 
targeting generally.'').
    \18\ This example illustrates the fraught nature of the 
Commission determining on its own--without Congressional 
authorization--what advertising content is harmful, discriminatory, 
and so on. Absent clear statutory authority, Commission enforcement 
on such matters becomes a tool driven by preferences of unelected 
officials.
    \19\ Compl. ] 69 (alleging ``categorization of consumers based 
on sensitive characteristics for marketing and other purposes is an 
unfair act or practice'').
---------------------------------------------------------------------------

    Count V, for ``Unfair Retention of Consumer Location Information,'' 
also falls short of what Section 5 requires. The Complaint alleges that 
Mobilewalla ``indefinitely retains detailed, sensitive information 
about consumers' movements, including consumers' location 
information.'' \20\ But there is minimal analysis as to how the 
practice of indefinite retention lacks potential countervailing 
benefits.\21\ For example, as the Complaint makes clear, Mobilewalla 
facilitates advertising and data analytics.\22\ To the extent 
Mobilewalla's information enables building and optimizing predictive 
models, or better tailoring advertisements over time to particular 
consumers, it seems likely Mobilewalla's indefinite retention of data 
may mean consumers correspondingly experience higher benefits. We will 
never know whether the practice has net benefits or not, since the 
Majority simply ignores that step and summarily condemns the practice.
---------------------------------------------------------------------------

    \20\ Id. ] 74.
    \21\ We should be considering such potential benefits, however. 
Cf. Melissa Holyoak, Remarks at National Advertising Division, A 
Path Forward on Privacy, Advertising, and AI, at 6-7, 9 (Sept. 17, 
2024), https://www.ftc.gov/system/files/ftc_gov/pdf/Holyoak-NAD-Speech-09-17-2024.pdf.
    \22\ Compl. ] 19.
---------------------------------------------------------------------------

    A final point today, about how my approach in this case relates to 
my support for Kochava, where I concurred in filing a second amended 
complaint. It is one thing to use our unfairness authority to directly 
address specific acts or practices of ``disclos[ure]'' or ``the 
revelation of sensitive locations implicating political, medical, and 
religious activities,'' where there is an appropriate ``focus[ ] on 
sales of precise geolocation data and related sensitive information,'' 
\23\ and where there has been a lack of consumer consent.\24\ The facts 
pled in Kochava relating to disclosure and sale in that case led me to 
believe that the particular ``act or practice'' of selling precise 
geolocation data had a direct connection--caused or was likely to 
cause--substantial injury to consumers.\25\
---------------------------------------------------------------------------

    \23\ See Concurring Statement, Kochava, supra note 1, at 2-3.
    \24\ Id. at 3.
    \25\ See 15 U.S.C. 45(n); see also Compl., Fed. Trade Comm'n v. 
Kochava, Inc., supra note 16, ] 132 (bringing a single count for 
``Unfair Use and Sale of Sensitive Data,'' and alleging that 
Defendants ``used and disclosed data'' from consumers (emphasis 
added)). The framing of Kochava's unfairness count resembles the 
framing of the first count in this Complaint against Mobilewalla, 
for ``unfair sale of sensitive location information,'' related to 
how Mobilewalla ``sells, licenses, or otherwise transfers precise 
location information . . . that reveal[s] consumers' visits to 
sensitive locations.'' See Compl. ]] 66-67. But this Complaint's 
misguided use of the Commission's unfairness authority goes well 
beyond Kochava's sole count.
---------------------------------------------------------------------------

    In contrast, and in focusing on other types of acts or practices--
such as the relevant data's collection, its use for categorization, or 
its indefinite retention--that are analytically removed from and did 
not themselves necessarily cause any alleged injury based on the facts 
pled, today's complaint fails to show how these acts or practices 
themselves satisfy what section 5 requires.\26\ On their own, the 
categorization, collection, or indefinite retention could certainly be 
factual predicates that precede substantial injury. But, at least as 
pled in this case, such practices themselves lack the causal connection 
to substantial injury. And, stepping back, there are certainly 
innocuous or beneficial instances of related data collection, its 
categorization, and its indefinite retention. Thus, this case's 
theories go far beyond the rationale that led me to support amending 
the complaint in Kochava.\27\ In fact, the claims in this case seem 
designed to lead directly to minimizing access to data, limiting the 
practice of drawing inferences from it, and setting particular 
boundaries around data retention. This case's regulatory implications 
are therefore far broader than those in Kochava.
---------------------------------------------------------------------------

    \26\ See 15 U.S.C. 45(n).
    \27\ Again, I ``support[ed filing the second amended complaint 
in Kochava] . . . because I agree[d] that the complaint adequately 
alleg[d] a likelihood of substantial injury in the revelation of 
sensitive locations implicating political, medical, and religious 
activities'' Concurring Statement, Kochava, supra note 1, at 2.
---------------------------------------------------------------------------

    Privacy is a vital policy topic. But unless and until the 
Commission receives new authorities, we must follow the law as Congress 
actually wrote it, not as some Commissioners or the Bureau Director 
might amend it if they were elected legislators.\28\ Robust enforcement 
consistent with our statutory authorities can have salutary deterrent 
effects. But robust enforcement that is inconsistent with our statutory 
authorities can also have profound ramifications on how markets 
function, and how market actors proceed--including in ways that harm 
the American people. And it can undermine our legitimacy in the eyes of 
not just Congress, but the public.\29\ Privacy's tradeoffs should be 
resolved by Congress, not unelected Commissioners. I do not believe 
section 5, as drafted, authorizes us to act as a roving legislator, 
writing law through complaints and settlement orders drafted to suit 
our purposes or political expediency. I dissent.
---------------------------------------------------------------------------

    \28\ See Concurring Statement, In re Gravy Analytics, supra note 
1, at 6 (``As we consider these type of difficult privacy questions 
in the future, it is of paramount importance that we challenge only 
unfair or deceptive conduct, supported by specific facts and 
empirical research, rather than demonizing the entire digital 
advertising industry. And until Congress acts to address privacy 
directly through legislation, it is vital we recognize and abide by 
the limited remit of the Commission's statutory authority.'').
    \29\ It is no coincidence that the number of constitutional 
challenges questioning our legitimacy has correlated with the 
Chair's general dismissal of the Commission's basic norms and 
integrity. See, e.g., Justin Wise, FTC's Targets Take Cues From High 
Court in Tests of Agency Power, Bloomberg Law (Sept. 26, 2024), 
https://news.bloomberglaw.com/antitrust/ftcs-targets-take-cues-from-high-court-in-tests-of-agency-power.

[FR Doc. 2024-28745 Filed 12-5-24; 8:45 am]
BILLING CODE 6750-01-P
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