Marketer that claimed it could tap devices for ad targeting will pay $880K settlement

In November 2023, we reported on dubious claims made by marketing firm Cox Media Group (CMG) Local Solutions. The company advertised a service called Active Listening on a website that said, “It’s true. Your devices are listening to you” and claimed it could use “voice data” to help advertisers target ads to specific people. Naturally, panic ensued. 404 Media, which initially spotted the website, for instance, wrote that the idea of smartphones listening to people to sell products “may finally be a reality.” The FTC said that CMG, 1010 Digital Works, and MindSift marketed Active Listening to small businesses and falsely claimed that the service would help the businesses target customers in specific geographies. “It is a basic rule of business that you need to be honest with your customers, and these companies failed to do that,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, in an accompanying statement. According to the FTC, the marketing companies also claimed that advertising targets opted into Active Listening by agreeing to third-party apps’ terms of service but that this was also not true. Even if Active Listening worked as CMG, 1010 Digital Works, and MindSift claimed, the FTC would still take issue with it, the government agency said: If the Active Listening service had functioned as advertised, this collection and use of consumers’ voice data without adequate consent would itself violate Section 5 of the FTC Act. The FTC had accused the three companies of violating the FTC Act and also accused 1010 Digital Works and MindSift of a second violation by giving CMG the “‘means and instrumentalities’ to deceive customers through marketing materials, sales pitches, and responses to customer questions that misled small businesses” about Active Listening. Under the settlement terms, the three companies are also prohibited from misrepresenting their services’ capabilities and their collection and use of voice data. “We are pleased to have this matter resolved,” a CMG spokesperson said in a statement to Wired. “Our local marketing team relied on marketing materials provided to us by a third-party vendor about their product. We withdrew the materials expeditiously and stopped further use of the product.” Active Listening may not have been real, but smart devices can still capture data in less obvious ways. More realistic risks include Meta smart glasses sharing intimate recordings, smart TVs tracking viewing habits, Ring cameras spying on users, and voice assistants listening without a proper prompt.