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

In November 2023, we reported on questionable claims made by marketing firm Cox Media Group (CMG) Local Solutions. The company advertised a service called Active Listening on a website, saying, “It’s true. Your devices are listening to you” and claiming it could use “voice data” to help advertisers target ads to specific people.

Naturally, panic ensued. For example, 404 Media, which initially viewed the website, wrote that the idea of ​​smartphones listening to people sell products “may finally be a reality.”

According to a since-deleted CMG blog post from November 2023 (still viewable via the Internet Archive’s Wayback Machine), the idea of ​​a marketing firm using AI to “detect relevant interactions through smartphones, smart TVs and other devices” in real time has raised concerns.

But it was also clear that CMG’s claims were unlikely to be true. The company never explained how it could remotely extract enough computing and networking power from users’ devices to secretly capture and send voice recordings in “real time” or gain more intimate access to people’s homes than law enforcement could without a warrant.

This week, the Federal Trade Commission (FTC) announced that CMG would pay $880,000 to settle the FTC’s allegations that CMG had “falsely” claimed that it would “offer an AI-powered service that could target localized advertisements based on interactions taken from consumers’ smart devices and whether consumers opted into such targeting.”

The money will be given to affected customers, the FTC said.

The FTC’s announcement reads:

according to [FTC-filed] According to the complaints, in fact, the service did not listen to consumers’ conversations or use voice data at all – nor did the service place ads precisely where customers wanted them. Instead, the service provided by the companies consisted of the resale of significantly marked-up email lists obtained from other data brokers.

After working with CMG, two marketing companies, Wisconsin-based 1010 Digital Works LLC and New Hampshire-based MindSift LLC, will each be paid $25,000.

In its since-deleted blog from 2023, CMG claimed that Active Listening relied on an unnamed CMG partner who had “increased ability to access microphone data on the device”. But when we first covered Active Listening, a company spokesperson admitted to Ars that CMG “does not listen to any conversations or have access to anything beyond the aggregated, anonymized, and fully encrypted data sets of third parties that may be used for ad placement.”