FTC fines Cox Media $930,000

1/ The FTC said on May 21 that Cox Media Group, MindSift and 1010 Digital Works agreed to pay $930,000 to settle charges they deceived customers about an “Active Listening” ad product. The agency said the companies claimed the service could target localized ads using conversations captured from consumers’ smart devices and that consumers had opted in. (ftc.gov) 2/ The core allegation is narrower and more concrete than the product’s marketing. The FTC said the service did not actually listen to consumers’ conversations, did not use voice data, and did not accurately place ads in customers’ desired locations. Instead, the agency said, the companies were reselling email lists from data brokers at a markup. (ftc.gov) 3/ Cox Media Group’s case is tied to CMG Media Corporation, a Delaware company with its principal office in Atlanta, according to the FTC complaint. The complaint says CMG began offering “Active Listening” to small-business customers in 2023 through a deal with MindSift, which sold the service on a white-label basis. (search.ftc.gov) 4/ The FTC complaint quotes the product’s pitch in unusually explicit terms. CMG’s marketing said smartphones are “technically always listening,” urged advertisers to “Know What They’re Talking About,” and said, “It may seem like black magic, but it’s not-it’s AI.” The complaint also said CMG claimed a technology partner could aggregate and analyze microphone data from devices such as smartphones and tablets. (search.ftc.gov) 5/ The regulator’s point was not that the product was creepy but real. It was that, according to the complaints, it was creepy and false. Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said: “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.” (ftc.gov) 6/ The FTC said the companies told small businesses they could reach consumers in specific local areas based on overheard conversations from smart devices. But the CMG complaint says the lists generated for the service included consumers from across the country, with only a fraction located near the advertiser. (ftc.gov) 7/ The enforcement action was split into three separate FTC matters. The agency named Georgia-based CMG Media Corporation, New Hampshire-based MindSift LLC, and Wisconsin-based 1010 Digital Works LLC. The FTC also said MindSift and 1010 Digital Works provided CMG with the “means and instrumentalities” to deceive customers through marketing materials, sales pitches and answers to customer questions. (ftc.gov) 8/ The cases are administrative consent matters, not courtroom findings after trial. The FTC’s orders say each respondent executed a consent agreement and neither admitted nor denied the allegations, except facts needed to establish jurisdiction. The matters are listed by the FTC as pending and include complaints, decision-and-order documents, and analyses of the proposed consent orders. (search.ftc.gov) 9/ The orders also impose conduct restrictions beyond the money. The FTC said the companies must not misrepresent, expressly or by implication, facts related to voice data or advertising and marketing services. In the CMG order, that includes bans on misrepresentations tied to whether a service uses voice data and how advertising services work. (search.ftc.gov) 10/ The near-term next step is public process, not a criminal case. The FTC said on May 21 that it had accepted the consent agreements, placed them on the public record for 30 days to receive comments, and then issued complaints and orders after considering any comments received. The case pages for CMG, MindSift and 1010 Digital Works are now posted in the FTC legal library. (search.ftc.gov)