‘Evil’ Listening Tool for Targeted Ads Didn’t Work, FTC Says

The Federal Trade Commission The commission announced Thursday that Cox Media Group and two other marketing companies, MindSift LLC and 1010 Digital Works, have agreed to pay a combined total of nearly $1 million to settle allegations that they misled their customers — other businesses — by saying they could help. target market based on audio tapes collected from consumer smart devices through a commercial suite called Active Listening.

In a statement to WIRED, a CMG spokesperson said, “We are pleased that this issue has been resolved. Our local marketing team relied on promotional materials provided by a vendor for their products. We promptly removed the materials and stopped using them.”

MindSift and 1010 Digital Works did not immediately respond to requests for comment. (Disclosure: The author of this article previously worked for the FTC.)

Over the years, conspiracy theories about companies listening to people on their phones to send them marketing have been around. debunked. Active Listening Marketing, first reported by 404 Mediathat fear aroused. According to the FTC, at one point a website advertising the service had the words, “Bad? Sure. Good for advertising? Sure.”

In three separate complaints, the FTC alleges that CMG made extensive claims about its ability to collect consumer conversations from “cell phones, smart TVs, smart speakers and other devices” and then use AI to match products to potential customers based on where they live and what they said. CMG and other companies also claimed that consumers consented to the collection and use of their voices, according to the complaint.

The FTC says none of those things were true.

Instead, the FTC alleges that CMG’s offering was “only for the purchase of consumer emails” and that the lists it resold “were valuable in terms of data.”

As part of their agreements with the FTC, CMG and two other companies promised not to make false claims about their marketing efforts or their collection and use of audio recordings or transcripts of consumer conversations.

CMG agreed to pay $880,000, while MindSift and 1010 Digital Works each agreed to pay $25,000. A total of $930,000 will go to businesses that were “affected” by the practices of the three companies, according to the FTC—in other words, businesses that purchased the Active Listening advertising service because they believed that the service worked as advertised, including that people consented to the use of their voice data.

The FTC’s complaint doesn’t make any claims about whether it’s illegal to use recordings from people’s smart devices to target them with ads, but the FTC has a problem with a company saying it does when it doesn’t. In a statement, Mr. Christopher Mufarrige, who is the head of the FTC’s consumer protection agency, said: “It is the most important rule of business to be honest with customers, and these companies failed to do so.”