Court dismisses FTC’s suit against Kochava…for now

A federal judge has, for now, dismissed the Federal Trade Commission’s lawsuit against the data broker Kochava, which accused it of selling location data that could be used to “track mobile device users to and from sensitive locations,” like healthcare clinics and domestic-violence shelters.

The FTC’s suit was a big deal, raising questions about marketplaces that collect and sell location data in light of the Supreme Court’s Dobbs decision. At the time, Kochava argued that the accusations were baseless, but that  it was planning on removing sensitive locations from its data marketplace nonetheless. The company previously told Marketing Brew that the removal went into effect in September.

Now, a federal judge has ruled that the commission’s complaint fell short of the legal bar set forth in the FTC Act that requires the possibility of “substantial injury” to consumers. “The FTC has not adequately alleged a likelihood of substantial consumer injury,” the court found.

Specifically, the ruling argued that location data, on its face, doesn’t necessarily reveal personal information. In other words, someone visiting a dentist doesn’t necessarily have cavities. Inferences, or guesses, would have to be made to reach that conclusion. The judge also argued that sensitive location data could be collected through other means, like by observing someone.

“The FTC does not actually claim that Kochava is disclosing private information, but rather that it is selling data from which private information might be inferred,” the court’s decision read. “Although this distinction does not eliminate all the privacy concerns voiced by the FTC in this lawsuit, it does lessen the severity of the alleged privacy injury.”

However, the court is giving the FTC another swing, allowing the commission 30 days to file an amended complaint.

“We remain confident in the legal arguments and rationale for dismissal of the FTC’s case and we are hopeful that challenging the FTC will bring necessary regulatory clarity that will ultimately benefit consumers and advertisers as a whole,” Kochava CEO Charles Manning said in an email via spokesperson Leslie Amadio.

The FTC didn’t immediately get back to Marketing Brew; we’ll update the story if and when it does.