A data broker tattled on app users’ whereabouts. It’s now in hot water with the FTC

In a first-of-its-kind settlement, the Federal Trade Commission is holding a data broker responsible for selling app users’ precise location information.

The consumer watchdog proposed a settlement last week with X-Mode Social and Outlogic, finding the company and its successor collected and sold information that could trace app users to “sensitive locations such as medical and reproductive health clinics, places of religious worship, and domestic abuse shelters.”

The settlement requires X-Mode and Outlogic, which took over the majority of X-Mode’s business in 2021, to implement a strict data compliance program that protects users’ privacy, blots out location data associated with “sensitive locations,” and allows users to opt out of data-sharing.

“Geolocation data can reveal not just where a person lives and whom they spend time with but also, for example, which medical treatments they seek and where they worship,” FTC Chair Lina M. Khan said in a statement. “The FTC’s action against X-Mode makes clear that businesses do not have free license to market and sell Americans’ sensitive location data. By securing a first-ever ban on the use and sale of sensitive location data, the FTC is continuing its critical work to protect Americans from intrusive data brokers.”

The other two FTC commissioners, ​​Rebecca Kelly Slaughter and Alvaro M. Bedoya, joined Khan in a statement, adding that “Americans deserve…protection from unchecked corporate surveillance.”

According to the FTC, the company’s privacy failings began with its own apps, Drunk Mode and Walk Against Humanity, and spread to other companies that build X-Mode and Outlogic’s location-tracking software into third-party apps. Drunk Mode was a University of Virginia student project designed to prevent mobile users from making digital decisions they’d regret while inebriated (see: texting your ex). Walk Against Humanity was advertised as a “snarky fitness tracker” that bullied users into getting into shape.

The FTC said it plans to publish more details about its agreement with the company, and the public will have a chance to comment on it before it’s finalized. If the company violates a finalized order, it could face penalties of $50,000 per offense, according to the agency.