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Cox Media Group will pay $880,000 to settle Federal Trade Commission allegations that it deceived customers by falsely claiming its AI-powered advertising service could target consumers based on conversations captured from their smart devices.
Two smaller marketing firms that worked with Cox Media Group — New Hampshire-based MindSift LLC and Wisconsin-based 1010 Digital Works LLC — will each pay $25,000, bringing the total settlement to $930,000. The FTC voted 2-0 to issue the proposed administrative complaints and accept the consent agreements with all three companies.
The FTC's case focused on a product called "Active Listening." The companies claimed it used a special algorithm to pick up conversations from devices and deliver precise ad targeting for small businesses. However, the FTC said the service did not listen to any voice data. Instead, customers got email lists bought from data brokers, sold back to them at higher prices, and the ads were not accurately targeted by location.
"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," Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection, said in a statement.
