The Federal Trade Commission (FTC) has reached a settlement with Cox Media Group (CMG) along with two other marketing companies, MindSift LLC and 1010 Digital Works, due to misleading claims regarding their “Active Listening” technology. The firms collectively agreed to pay nearly $1 million after being accused of deceiving clients into believing they could target advertisements based on audio collected from consumers’ smart devices.
CMG stated their satisfaction with the resolution and acknowledged reliance on third-party marketing materials. Meanwhile, MindSift and 1010 Digital Works did not respond to requests for comments.
The concept of companies eavesdropping through phones to sell ads has long been a subject of skepticism and conspiracy theories. The FTC revealed that the marketing for Active Listening, which described its capabilities as "creepy" yet effective, amplified these fears. The agency’s complaints indicated CMG misrepresented its ability to gather consumer conversations from devices like smartphones and smart TVs and claimed to use AI for targeted advertising. CMG’s representation that consumers consented to the use of their voice data was also deemed false.
Ultimately, what CMG was actually selling turned out to be simple consumer email lists, substantially marked up from their original cost. The settlement mandates CMG and the other firms to refrain from making misleading representations about their marketing services and the collection of audio data.
CMG’s settlement included a payment of $880,000, while each of the other two companies will pay $25,000, totaling $930,000 to support businesses that were misled by these claims. The FTC emphasized the importance of honesty in business practices, highlighting that companies must not mislead their clients about their capabilities.
