The ruling was a blow to the commission’s intensifying efforts to crack down on the sale and use of sensitive personal information.
A federal judge in Idaho on Thursday dismissed a lawsuit against Kochava, a major location data broker, brought last year by the Federal Trade Commission. In a ruling, the judge wrote that regulators had not provided sufficient evidence to back up their claims that the company was unfairly selling information on the precise locations of millions of people’s mobile phones.
But the court gave the F.T.C. the opportunity to strengthen its arguments if it wanted to proceed with the case.
The ruling deals at least a temporary blow to recent aggressive efforts by the commission to crack down on the sale and use of potentially sensitive information, like data on consumers’ drug prescriptions, religious affiliations or sexual orientation.
Kochava, based in Sandpoint, Idaho, is a mobile analytics firm that uses location data to help marketers target and measure ad campaigns. The company typically collects more than 90 location data points per day from about 35 million active mobile device users, according to the judge’s ruling in the case — location coordinates that can “reveal where each mobile device has been approximately every 15 minutes.”
In its complaint against Kochava, filed last August, the F.T.C. argued that the company’s sale of geolocation data on tens of millions of smartphones could be used to track people’s visits to private locations such as churches, mosques, synagogues, abortion clinics, domestic violence shelters, medical centers and homeless shelters.
The location data could be used to track not just the dates and times that patients visited abortion clinics, regulators said, but also to track the locations of health care professionals who provided medical treatments like abortions.
In an investigation into location data brokers several years ago, for instance, reporters at The New York Times were able to use a mobile device location data set to track a smartphone user from their home outside of Newark to a Planned Parenthood clinic.
“The sale of such data poses an unwarranted intrusion into the most private areas of consumers’ lives and causes or is likely to cause substantial injury to consumers,” the F.T.C. complaint said.
But a judge in United States District Court for the District of Idaho dismissed the agency’s claim that Kochava’s sale of location data was such a severe intrusion on consumers’ privacy that it amounted to a substantial injury.
And, while the court agreed with the F.T.C. that Kochava’s sale of location data could enable third parties to track and harm smartphone users who visited sensitive locations, the judge said that regulators had not provided adequate evidence that consumers were actually suffering — or were likely to suffer — substantial harm.
In a statement, Douglas Farrar, a spokesperson for the F.T.C., said: “We are pleased the Court agreed with our key argument and we look forward to continuing to press our case on behalf of American consumers.”
Charles Manning, the founder and chief executive of Kochava, welcomed the judge’s ruling, saying that the company complied with “all rules and laws,” including privacy laws.
“We are hopeful that challenging the F.T.C. will bring necessary regulatory clarity that will ultimately benefit consumers and advertisers,” he said in a statement.
The case dismissal highlights the uphill battle regulators are facing in trying to restrict or bar certain kinds of data collection and usage.
In an administrative action earlier this week, the Federal Trade Commission proposed barring Meta from monetizing the personal data of users under the age of 18 on Instagram, Facebook, WhatsApp and other company platforms. Such a blanket ban could prohibit Meta from using young people’s data for purposes like targeting advertising or “enriching its own data models and algorithms,” the agency said in an administrative order.
Meta said it would “vigorously fight” the F.T.C.’s action and expected to prevail.
