FTC orders $930,000 payout after firms misrepresent 'Active Listening' ad tech
The US regulator found that services claiming to use AI and smart device audio for targeted advertising were merely reselling email lists at a markup.
The US Federal Trade Commission has announced settlements with three marketing firms—Cox Media Group, MindSift LLC, and 1010 Digital Works—requiring them to pay a combined $930,000 to resolve allegations that they deceived business customers. The companies marketed a service called Active Listening, claiming it used artificial intelligence to analyse audio recordings from consumers’ smart devices to target advertisements.
According to the FTC, the technology did not record or analyse audio as advertised. Instead, the service consisted of reselling consumer email lists at a significant markup. The regulator stated that the firms made false claims about their ability to collect conversations from smartphones, smart TVs, and smart speakers, and falsely asserted that consumers had consented to the collection and use of their voice data.
Cox Media Group agreed to pay the largest portion of the settlement at $880,000, while MindSift and 1010 Digital Works each agreed to pay $25,000. The funds will be distributed to businesses that purchased the Active Listening service under the impression that it functioned as described, including the alleged use of consented voice data for ad targeting.
In a statement regarding the resolution, a Cox Media Group spokesperson said the company was pleased to have the matter resolved. The spokesperson claimed that the firm’s local marketing team relied on materials provided by a third-party vendor and that they withdrew the materials expeditiously upon learning of the issues. MindSift and 1010 Digital Works did not immediately respond to requests for comment.
As part of the settlements, the companies have agreed to cease misrepresenting their marketing services or the collection and use of audio recordings or transcripts of consumer conversations. Christopher Mufarrige, the FTC’s director of the Bureau of Consumer Protection, emphasised that honesty with customers is a basic rule of business, noting that the companies failed to meet this standard.
