• by Wendy Davis  @wendyndavis, October 31, 2024

The Federal Trade Commission is urging a federal judge to again reject data broker Kochava's request to dismiss charges that it engages in an unfair business practice by allegedly selling smartphone users' precise geolocation data.

Kochava and its subsidiary, Collective Data Solutions, “waste the court’s and the parties’ time and resources,” by reiterating its prior unsuccessful arguments, the FTC argues in court papers filed this week with U.S. District Court Judge B. Lynn Winmill in Idaho.

“As this court has already determined, defendants’ arguments are contrary to the law and common sense,” the FTC writes.

The agency's motion comes in a battle dating to August 2022, when the FTC alleged that Kochava wrongly sells the type of data that could expose sensitive information -- such as whether people visited doctors' offices or religious institutions.

Specifically, Kochava allegedly sells precise geolocation data as well as mobile advertising IDs -- unique, 32-character identifiers that persist, unless consumers proactively reset them.

Kochava countered that this data isn't “personally identifiable,” and that the agency's allegations -- even if proven true -- wouldn't amount to “unfair” conduct. 

Winmill dismissed the original complaint, but allowed the FTC to beef up its allegations and bring an amended complaint.

The FTC did so and Winmill ruled in February that the agency could proceed with the revised claim, which he said was “legally and factually plausible.”

Winmill essentially said at the time that the allegations, if proven true, could support the claim that Kochava engaged in unfair conduct -- meaning activity that could cause “substantial injury” to consumers, and wasn't reasonably avoidable or outweighed by benefits.

“Kochava allegedly provides its customers with vast amounts of essentially non-anonymized information about millions of mobile device users’ past physical locations, personal characteristics (including age, ethnicity, and gender), religious and political affiliations, marital and parental statuses, economic statuses, and more,” he wrote.

“This alleged invasion of privacy -- which is substantial both in quantity and quality -- plausibly constitutes a 'substantial injury' to consumers,” he added.

The FTC in July amended its complaint by adding the subsidiary Collective Data Solutions as a defendant.

Three weeks ago, Kochava (and its subsidiary) urged Winmill to throw out that amended complaint, renewing the contention that the allegations, even if proven true, wouldn't support the conclusion that the company engaged in “unfair” conduct. 

Among other arguments, Kochava said in that new motion, filed October 7, that an “intangible harm such as an invasion of privacy,” isn't the type of “substantial injury” that can support a charge of unfair conduct.

Kochava also submitted to Winmill an unpublished law review article by Douglas Meal, a cybersecurity litigation professor who teaches at Cleveland State University College of Law and Boston College Law School. Meal -- who previously represented LabMD in its successful battle with the FTC over cybersecurity -- argues in that article that an “intangible” privacy harm can't in itself be a “substantial injury.”

The FTC says in its new papers that Meal's article “adds nothing new to the discussion.”

“This court’s prior conclusion was well-reasoned and defendants offer no reason for the court to revisit it,” the FTC argues.

Though Kochava is fighting the FTC's charges, the company recently agreed to settle three class-action privacy complaints by consumers.