- The FTC finalized an order requiring Cox Media Group (CMG), MindSift LLC, and 1010 Digital Works LLC to pay a total of $930,000 to settle allegations that the companies misled consumers about an AI-powered service, which they allegedly claimed could target localized ads based on conversations captured from consumers’ smart devices and that consumers had opted into such targeting.
- In three separate complaints, initially announced in May, the FTC alleged that Georgia based media company and marketing company CMG Corporation, which does business as Cox Media Group, along with the marketing firms MindSift and 1010 Digital Works deceived consumers by claiming they used a special algorithm to listen in on and detect pertinent conversations from smart devices in order to target ads to consumers within a specific geographic region. An investigation found that the marketing service wasn’t based on voice data and consumers hadn’t opted for the service. If the service had functioned as advertised, this collection and use of consumers’ voice data without adequate consent would itself violate the FTC Act.
- Under the proposed orders settling the FTC’s allegations, CMG must pay $880,000 while MindSift and 1010 Digital Works must each pay $25,000, which will be used to provide redress to CMG customers impacted by the alleged practices. Additionally, each defendant is prohibited from making any misrepresentation about the qualities or characteristics of its advertising or marketing services. They are further barred from making deceptive claims regarding the collection, use, or disclosure of voice data, whether consumers have consented to such practices, and the ability of their services to target consumers based on geographic location.