Media giant settles for $930k with FTC over allegations it lied about eavesdropping on conversations through smart devices

Cox Media Group and two marketing companies were accused of misleading customers with advertising for an AI-powered service called “Active Listening.” The service was promoted as an algorithm that would use snippets from user conversations allegedly overheard by smart home devices to generate targeted ads for other users in specific geographic regions. The FTC alleged that the companies claimed consumers consented to this process and that the product actually did not perform any listening or use voice data. Instead, the companies allegedly sold lists of email addresses obtained from data brokers at a significant markup. The FTC also alleged that consumers did not opt into the advertised service and that misrepresentations were made to potential customers.

"The marketing product, called "Active Listening," was pitched as a novel algorithm that could take snippets from user conversations, supposedly overheard by their smart home devices, and use them to generate targeted ads to other users in specific geographic regions."

"In reality, claimed the watchdog, the trio was instead selling lists of email addresses bought from data brokers "at a significant markup," the FTC said. There had been no listening in on smart devices or conversations of any kind, there was no voice data being used at all, and consumers had not given their consent to the advertised service, the regulator went on to allege."

""Not only did the product these companies marketed not do what they claimed it did, but they also misled potential customers by claiming consumers had opted into this service when it's clear they did not," said Christopher Mufarrige, director at the FTC's Bureau of Consumer Protection."

""It is a basic rule of business that you need to be honest with your customers, and these companies failed to do that.""

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