The Federal Trade Commission (FTC) has prohibited X-Mode Social and Outlogic from selling or sharing sensitive data to settle allegations regarding precise location data.

In its first settlement with a data broker concerning the collection and sale of sensitive location information, the FTC also charged that the companies failed to put in place reasonable and appropriate safeguards on the use of such information by third parties. The raw location data that X-Mode/Outlogic has sold is associated with mobile advertising IDs, which are unique identifiers associated with each mobile device. This raw location data is not anonymized, and is capable of matching an individual consumer’s mobile device with the locations they visited. In fact, some companies offer services that help companies match such data to individual consumers.

According to the FTC’s complaint, until May 2023, the company did not have any policies in place to remove sensitive locations from the raw location data it sold. The FTC says X-Mode/Outlogic did not implement reasonable or appropriate safeguards against downstream use of the precise location data it sells, putting consumers’ sensitive personal information at risk. The information revealed through the location data that X-Mode/Outlogic sold not only violated consumers’ privacy but also exposed them to potential discrimination, physical violence, emotional distress and other harms, according to the complaint.

The FTC also says the company failed to ensure that users of its own apps, Drunk Mode and Walk Against Humanity, as well as third party apps that used the X-Mode/Outlogic’s SDK were fully informed about how their location data would be used. The company also failed to employ the necessary technical safeguards and oversight to ensure that it honored requests by some android users to opt out of tracking and personalized ads, according to the complaint.

The FTC says these practices violate the FTC Act’s prohibition against unfair and deceptive practices.

In addition to the limits on sharing certain sensitive locations, the proposed order requires X-Mode/Outlogic to create a program to ensure it develops and maintains a comprehensive list of sensitive locations, and ensure it is not sharing, selling or transferring location data about such locations. Other provisions of the proposed order require the company to:

• Delete or destroy all the location data it previously collected and any products produced from this data unless it obtains consumer consent or ensures the data has been deidentified or rendered non-sensitive.
• Develop a supplier assessment program to ensure that companies that provide location data to X-Mode/Outlogic are obtaining informed consent from consumers for the collection, use and sale of the data or stop using such information.
• Implement procedures to ensure that recipients of its location data do not associate the data with locations that provide services to LGBTQ+ people such as bars or service organizations, with locations of public gatherings of individuals at political or social demonstrations or protests, or use location data to determine the identity or location of a specific individual.
• Provide a simple and easy-to-find way for consumers to withdraw their consent for the collection and use of their location data and for the deletion of any location data that was previously collected.
• Provide a clear and conspicuous means for consumers to request the identity of any individuals and businesses to whom their personal data has been sold or shared or give consumers a way to delete their personal location data from the commercial databases of all recipients of the data.
• Establish and implement a comprehensive privacy program that protects the privacy of consumers’ personal information and also create a data retention schedule.

The proposed order also limits the company from collecting or using location data when consumers have opted out of targeted advertising or tracking or if the company cannot verify records showing that consumers have provided consent to the collection of location data.