FTC to Require Cox Media Group, Two Other Firms to Pay Nearly $1 Million to Settle Charges They Deceived Customers About “Active Listening” AI-Powered Marketing Service

The Federal Trade Commission will require Cox Media Group (CMG) and two smaller marketing firms to pay a total of $930,000 to settle allegations they deceived customers by falsely claiming to offer an AI-powered service that could target localized ads based on conversations captured from consumers’ smart devices and that consumers had opted into such targeting. In three separate complaints, the FTC alleged that Georgia-based media and marketing company CMG Media Corporation, which does business as Cox Media Group, and two marketing firms it worked with, New Hampshire-based MindSift LLC and Wisconsin-based 1010 Digital Works LLC, deceived customers 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. Contrary to these companies’ claims, however, the marketing service wasn’t based on voice data and consumers hadn’t opted into this service. Under the proposed orders settling the FTC’s allegations, CMG must pay $880,000 while both MindSift and 1010 Digital Works will each pay $25,000, which will be used to provide redress to CMG customers impacted by these practices. In addition, each defendant will be prohibited from making any misrepresentation about:

• the qualities or features of its advertising or marketing services;
• the collection and use of voice data and whether consumers have provided their consent to collect, use or disclose their voice data; and
• the geographic targeting capabilities of its advertising or marketing services.