Tech Fix: FTC sues Kochava, flexing its muscles on sensitive data sales

Tech Fix: FTC sues Kochava, flexing its muscles on sensitive data sales

Welcome to The Tech Fix, a weekly newsletter where we break down the latest technology news and trends from the advertising and marketing industry, curated by technology editor Jessica Heygate.

Hot topic: Netflix has plucked Snap’s top advertising executives to lead its new ad venture. Snap chief business officer Jeremi Gorman is joining as president of worldwide advertising and VP of ad sales Peter Naylor is transferring his role to the streamer. 

The duo, who start in late September, have ideal experience for Netflix as it prepares to launch its first ad-supported offering in early 2023. Prior to Snap, Gorman worked as a senior ad sales executive at Amazon, while Naylor held senior ad sales roles at Hulu and NBCUniversal.

But their departures will be a blow to Snap, which has faced a steady deceleration in its ad business and therefore its overall growth rate over the past year. The social platform said in July it was planning to reduce operating expenses by slowing hiring. Now, after losing nearly 80% of its stock value since the beginning of the year, it has announced plans to slash 20% of its global headcount, or roughly 1,300 people. 

Rather than replacing Gorman and Naylor, Snap has named SVP of engineering Jerry Hunter chief operating officer, giving him oversight of ad products and ad sales.

Under the hood: A broad crackdown on data brokers’ sale of geolocation data appears to be on the horizon in the U.S., based on recent developments from the Federal Trade Commission. On Monday the FTC sued location data provider Kochava for allegedly selling data that can be used to track people who visit “sensitive locations” including abortion clinics, places of worship, domestic violence shelters and addiction recovery facilities.

The lawsuit claims Kochava sold geolocation data from “hundreds of millions” of mobile devices that could be used to identify people, and that the company “fails to adequately protect its data from public exposure” by allowing “anyone with little effort to obtain a large sample of sensitive data.” This “puts consumers at significant risk,” according to the FTC.

The FTC seeks to halt Kochava’s sale of such data and require it to delete sensitive information.

“Where consumers seek out health care, receive counseling or celebrate their faith is private information that shouldn’t be sold to the highest bidder,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement.

The FTC said that cracking down on “harmful commercial surveillance practices” and sensitive data sales is “a top priority.” The directive has come straight from the top: President Joe Biden urged the FTC to combat “digital surveillance” of reproductive care in a July 8 executive order, weeks after abortion rights in the U.S. were overturned. Shortly after, the FTC warned that it will “vigorously enforce the law” if it uncovers data misuse.

The FTC filed a complaint against fertility-tracking app Flo Health in January 2021 for sharing sensitive health data with third parties. It issued a call for greater transparency and accountability among data brokers in a 2014 in-depth study.

Since vast swathes of the advertising industry use geolocation data to track footfall and target consumers, the FTC’s movements should come as a warning to get your house in order. 

Fresh tech:

  • The Interactive Advertising Bureau has released its Intrinsic In-Game (IIG) measurement guidelines, developed with IAB Tech Lab and the Media Rating Council. It is the first time the IAB has updated its in-game ad measurement standards since 2009.
  • The ANA has introduced a new education program for businesses and consumers to help combat online hate speech, built collaboratively with online platforms and produced by the Brand Safety Institute. It includes 36 original video education modules in English and Spanish, housed on a new website. The ANA is working with the Better Business Bureau to scale and pilot the program with SMBs in advance of an official campaign launch later this year.
  • Meta has rolled out a new NFT integration that will allow users to post their digital collectibles across Facebook and Instagram by connecting their digital wallets to either app. Currently, it’s a capability only available to the U.S. users.

Regulatory developments:

  • Meta and Twitter recently removed a “web of accounts” that pushed pro-Western narratives to users in the Middle East and Central Asia for nearly five years, according to a joint investigation from Graphika and the Stanford Internet Observatory. The investigation, which discovered covert campaigns that promoted U.S. interests while opposing countries such as Russia, China and Iran, is believed to be the most extensive case of a pro-Western influence operation on social media.Twitter said the accounts violated its policies on “platform manipulation and spam,” while Meta removed the accounts for “coordinated inauthentic behavior.”
  • Meta’s Facebook hasagreed to settle a class action lawsuit related to the 2016 Cambridge Analytica data scandal. The suit, brought forward by Facebook users in 2018, alleged the social network failed to safeguard user data and violated consumer privacy laws by sharing information with the now-defunct U.K. research firm Cambridge Analytica. The firm used the data of as many as 87 million Facebook users to target voters in Donald Trump’s 2016 presidential campaign. Meta CEO Mark Zuckerberg and former COO Sheryl Sandberg had been called to testify on the case next month.
  • U.S. regulators are preparing to audit ecommerce giants Alibaba Group and JD.com and fast food restaurant operator Yum China, Reuters reports. It comes as part of a landmark deal, struck between the U.S. and China last week, permitting the U.S. to vet accounting firms in mainland China and Hong Kong. More than 160 Chinese firms have been threatened with delisting from U.S. stock exchanges if they did not comply with audit requirements.

Buddy up: Mediahub has struck a partnership with metaverse solutions provider LandVault, which will provide Web3 strategy and consulting services to Mediahub clients globally. As part of the partnership, the companies have co-developed a Web3 RFP brief which will be used as a guide by agency teams to strategize new creative media executions in Web3. Mediahub is also launching a new Web3 practice called Rabbit Hole Ocean, an extension of the agency’s Radical + Disruptive Lab.

Dollars and deals:

  • Time has bought website building platform Brandcast. It is the first acquisition made by the media company since it was bought by Salesforce founder Marc Benioff and his wife Lynne in 2018. Time will use the software company to build sites for its smaller verticals and custom content websites for its advertising clients.
  • Creative management platform Connected-Stories has completed a $2 million seed round led by BlackSheepMadTech Fund. The  investment will support the continued development of the platform and growth in the U.S.

Reading list: The spread of disinformation online is the second-highest concern among citizens in advanced economies, coming in only behind climate change, according to new research from The Pew Research Center. Read the full report, it’s full of interesting, country-specific insights.

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