Mobile Data Broker Kochava Wants FTC's 'Scandalous' Complaint Kept Under Wraps

Mobile data broker Kochava doesn't want the public to see the Federal Trade Commission's newest privacy complaint against the company.

In a document filed late Tuesday, Kochava says the FTC's complaint is “rife with false statements” and contains “false and highly inflammatory allegations clearly aimed at misleading this court and the public.”

“To allow the scandalous material in the amended complaint to become public would forever prejudice Kochava in this matter (which is the FTC’s intent) through the public release of misinformation and incorrect alleged facts that the FTC knows are false, and should have never included in a filing in this court,” the company writes.

The company says it plans to ask U.S. District Court Judge B. Lynn Winmill in Idaho to keep the complaint sealed -- a move that would prevent consumers and other companies from seeing the document.

Kochava's new filing marks the latest development in a battle between the FTC and Kochava that dates to last August. The FTC sued Kochava that month for allegedly selling the kind of precise geolocation information that could expose sensitive information, such as whether people visited doctors' offices or religious institutions. (Kochava had sued the FTC earlier that same month, in an obvious attempt to preempt the FTC's complaint; Kochava's suit was dismissed with prejudice in May.)

The FTC claimed Kochava's alleged sale of the information was unfair, arguing that disclosing location data could cause result in stigma, discrimination or other injuries to consumers. The agency also argued sharing location data was such an extreme privacy violation that it should be considered harmful in itself.

In May, U.S. District Court Judge B. Lynn Winmill in Idaho threw out the claims, ruling that the FTC's allegations, even if proven true, wouldn't show that Kochava created a “significant risk” of harm to consumers.

Winmill said in his ruling that the FTC didn't allege that any consumers were harmed by Kochava, and that the alleged privacy violation wasn't in itself a “substantial injury.”

He added that any “private information” stemming from Kochava's data would come from unreliable inferences.

“Geolocation data showing that a device visited an oncology clinic twice in one week could reveal that the device user suffers from cancer,” he wrote. “Or it may instead reveal that the person has a friend or family member who suffers from cancer.”

Winmill also said that information that can be inferred from location data “is generally accessible through other, lawful means.”

“A third party may, for example, observe a person’s movements on public streets and sidewalks as they go to and from home or a medical facility,” he wrote. “A third party may also discover a person’s home address by reviewing publicly accessible property records.”

The ruling allowed the FTC to revise its complaint and bring it again.

Earlier this month, the FTC did so, but under seal. The agency said at the time that it was submitting the revised complaint confidentially “out of an abundance of caution,” adding that Kochava may claim the amended complaint draws on trade secrets.

On Monday, the FTC asked Winmill to unseal the document, writing that the company hadn't issued requests to black out any specific portions of the complaint, and that most of the allegations concern information Kochava has already made public.

“For example,” the agency writes, “Paragraph 51 excerpts from a document that Kochava designated 'proprietary' or 'highly confidential,' yet Kochava brags about its data identifying consumers based on ethnicity in its own online marketing material,” the FTC asserted. “Kochava cannot assert that information that is already public should remain under seal.”

For its part, Kochava says that it plans to file a motion seeking to maintain the complaint under seal.

“Kochava will further seek to maintain the seal of the amended complaint due to the inclusion therein of an intentionally misleading and technologically implausible narrative of alleged wrongdoing,” the company's lawyers write.

The company's bid to keep the entire complaint under wraps appears to face long odds.

“There's a very strong presumption of open court proceedings in this country,” John Davisson, director of litigation at the advocacy group Electronic Privacy Information Center tells MediaPost.

“What's stated in a complaint is not a basis to seal a complaint,” he says.

Davisson adds that if a complaint contains trade secrets whose disclosure could cause significant harm, there may be grounds to black out that material. But, he says, it's “implausible on its face” that the entire complaint contains such information.

Kochava intends to file its next round of papers by June 27.

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