Kochava Battles FTC Over 'Unfair' Sale Of Location Data

The Federal Trade Commission has no grounds to sue mobile analytics company Kochava for allegedly selling smartphone users' precise geolocation data, the company says in new court papers.

“The 'unfair' practice alleged is not, on its face, a public policy violation by Kochava, nor is the alleged conduct immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers,” the company writes in a motion filed Friday with U.S. District Court Judge B. Lynn Winmill in Coeur D'Alene Idaho.

Kochava is asking Winmill to dismiss the FTC's complaint, filed in late August, which alleges that the company engaged in an unfair practice by selling information about people's precise locations -- including information that could reveal visits to sensitive locales.

The complaint includes allegations that Kochava's data can be used to identify not only "consumers who have visited an abortion clinic and, as a result, may have had or contemplated having an abortion," but also "medical professionals who perform, or assist in the performance, of abortion services.”

The agency is seeking an injunction that would prohibit Kochava from engaging in unfair practices.

Kochava argues the complaint should be thrown out for several reasons, including that the FTC's allegations, even if true, wouldn't amount to “unfair” conduct.

The company contends that practices can only be considered “unfair” if they violate an established legal policy, or are in themselves harmful or oppressive.

Kochava says those standards weren't met by the FTC, arguing that no current law or regulation prohibits the sale of location data, and such sales don't in themselves harm consumers.

"The complaint contains no mention of an existing law, rule, regulation or policy specifically prohibiting the alleged conduct related to geolocation data,” Kochava writes.

The company adds that the FTC's claims “are predicated on alleged misconduct of third parties ... whose speculative and sensationalized tracking of consumers to supposed sensitive locations for nefarious purposes has no nexus with Kochava or with the legitimate pro-competitive purposes of its geolocation data services.”

Kochava also says the FTC lacks grounds for an injunction, given that the company already rolled out a “privacy block” feature that removes known health services location from its marketplace.

The FTC sued Kochava two weeks after the company sued the FTC, in an attempt to stave off the agency's complaint.

Kochava claimed in its initial court papers, filed August 12, that it doesn't “uniquely identify users,” but merely links the mobile advertiser identification to “hashed emails and primary IP addresses.”

The FTC countered in its lawsuit that some data brokers advertise the ability to match mobile identifiers with names and physical addresses.

But Kochava argued in its most recent court papers that this matching service allegedly is offered by “other unspecified data brokers,” not itself.

While the FTC has brought numerous privacy enforcement actions, most appear to include allegations that companies misrepresented their practices, while the complaint against Kochava alleges only that it acted unfairly.

It's not yet clear how judges will view the FTC's claim. When the case was first filed, Santa Clara University professor Eric Goldman told MediaPost that the FTC appeared to have made “aggressive moves” in its complaint.

“They don't actually allege that anyone has actually been harmed by this data,” Goldman said at the time, adding that the agency was “moving into uncharted territory” with the lawsuit.

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