The Federal Trade Commission (FTC) announced on Thursday that Cox Media Group (CMG) and two marketing firms, MindSift LLC and 1010 Digital Works, have agreed to pay a combined $930,000 to settle allegations that they deceived customers by falsely claiming to use consumers’ audio data for targeted advertising through a service called Active Listening.
What happened
The FTC charged that CMG, MindSift LLC, and 1010 Digital Works marketed the so-called Active Listening technology by claiming it could tap into audio recordings from consumers’ smartphones, smart TVs, smart speakers, and other devices. They purported to use artificial intelligence to analyze this data and target advertisements based on consumers’ locations and conversations. Moreover, the companies asserted that consumers had consented to their voice data being collected and used.
However, the FTC found that these claims were untrue. Instead, CMG was merely selling consumer email lists with significant markups, without any actual audio data collection or analysis. The three companies misled businesses that purchased the Active Listening service into believing it operated as advertised.
As part of the settlement, CMG agreed to pay $880,000, while MindSift and 1010 Digital Works each agreed to pay $25,000. The FTC will distribute the funds to businesses that bought the fraudulent services. The companies also committed to refraining from making false claims about collecting or using consumer audio recordings or transcripts.
Why it matters
This case highlights the FTC’s focus on combating deceptive marketing practices, particularly those playing on consumer fears of invasive data collection technologies. Although the legality of using audio data for ad targeting remains a broader regulatory question, the FTC emphasized that honesty with customers about data collection practices is a fundamental business requirement. The settlement sends a clear message that falsely advertising advanced data capabilities will not be tolerated.
Background
Claims that companies listen to consumers through smart devices for targeted advertising have been widely debunked, often dismissed as conspiracy theories. Yet, the marketing campaign for Active Listening—first reported by 404 Media—revived those fears by featuring slogans such as “Creepy? Sure. Great for marketing? Definitely.” This case marks a rare instance where regulators have taken action against companies for deceptively exploiting such claims in the advertising industry.
Sources
This article is based on reporting and publicly available information from the following source:
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