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US lawmakers push for new rules to prevent illegal sale of users’ location data

The lawmakers pointed out the lack of regulations in safeguarding location data and made certain recommendations.

Develop new rules against the collection and sale of consumers’ location data, a group of 44 Democrats in the US House of Representatives wrote in a letter to the Federal Trade Commission (FTC) and Federal Communications Commission (FCC). App developers are “able to collect sensitive user information and sell it to interested parties for a substantial profit” and they are able to harvest personal information, such as geolocation and phone identifiers, even after permission has been denied by the users, the letter warned.

We are concerned that the continued, unregulated commercialization of private geolocation data compromises the safety and privacy of consumers. — letter addressed to FTC Chair Lina Khan and FCC Chair Jessica Rosenworcel.

Data brokerage is a multi-billion dollar business as user information, including location data, is available at a price from data brokers without any regard to privacy. The US lawmakers, in their letter, underscored how most people, especially marginalised groups, do not know where their data is going and how it is being used.

What are the key demands made in the letter?

The House Democrats wrote that both FTC and FCC have “punished bad actors for failing to safeguard location data but fell short of establishing prophylactic rules that will protect consumers”. Here are their recommendations for the two federal agencies:

  • Define location data usage: The letter asked FTC to define the sale, transfer, use, or purchase of precise location data collected by an app for purposes other than the essential function of the app as an “unfair act or practice”. It also asked the FTC to call for app developers to obtain express, informed user consent for separate data usage. The lawmakers explained that this would severely constrain the use of software development kits that trade their functionality in exchange for commercially valuable location data.
  • Designate mislabeling of data: The letter called for app developers’ mislabeling of users’ location data as “anonymous” to be designated as a “deceptive practice”. The letter reasoned that app developers fail to convey how collected data can be traced back to the user with de-anonymization tactics by claiming users’ location data will be anonymous, instilling a false sense of security.
  • Enforce penalties: The letter spelled out how penalties punish bad actors, reinforce the FTC’s authority, and deter companies from exploiting consumers. “Assigning penalties is one of the most effective and efficient ways for the FTC to enforce the law, yet the FTC has rarely used this penalty authority over the last four decades,” the letter read.
  • Reaffirm prohibitions: The letter asked the FCC to reaffirm certain prohibitions as it pursues its enforcement and policy agenda, including through future rulemaking. For example, it cited the customer proprietary network information (CPNI) protections which apply to information collected from a mobile device, including “the location of a customer’s use of a telecommunications service.

Actions taken by the FCC and FTC on location data

The FCC fined four major wireless carriers in the US for secretly selling subscribers’ location data for years with almost no constraints or disclosure. These proposed fines required T-Mobile to pay $91M; AT&T, $57M; Verizon, $48M; and Sprint, $12M, as per TechCrunch.

The case stretched on for more than a year and a half after initial reports that private companies were accessing and selling real-time subscriber location data to anyone willing to pay, the tech website added. The FCC’s Commissioners, however, decried that the $208 million penalties to be paid by these corporations are not proportionate given the amount of revenue they generate every year,  TechCrunch explained in its report.

The FTC banned the company SpyFone from engaging in the surveillance business, following allegations that the “stalkerware” app secretly harvested and shared data on people’s physical movements, phone use, and online activities through a concealed hack of victims’ devices.

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“The company’s apps sold real-time access to their secret surveillance, allowing stalkers and domestic abusers to stealthily track the potential targets of their violence. SpyFone’s lack of basic security also exposed device owners to hackers, identity thieves, and other cyber threats. In addition to imposing the surveillance-business ban, the FTC’s order requires SpyFone to delete the illegally harvested information and notify device owners that the app had been secretly installed,” the FTC had said in a press release.

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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