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.
The FTC says CMG's "Active Listening" product didn't spy on consumers at all — it just resold email lists from data brokers
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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.
Another part of the FTC's complaint focused on consent. The companies told clients that consumers had agreed to Active Listening surveillance by accepting standard app terms of service. The FTC disagreed, saying that simply accepting basic app agreements does not count as real consent to collect voice data. The agency also said that even if the product worked as described, it would still violate Section 5 of the FTC Act without true consumer consent.
The product had attracted public scrutiny as far back as 2023, according to Gizmodo, after CMG's own promotional materials enthusiastically embraced the idea that devices were eavesdropping on consumers. The company's website at the time read, "It's True. Your Devices Are Listening to You." Cox Media Group later pulled back from those claims, according to The Verge.
Reached for comment by Wired, a Cox Media Group spokesperson said the company welcomed the resolution and explained that the product's promotional materials had come from an outside vendor, adding that CMG had pulled those materials and discontinued the product.
Going forward, all three companies face prohibitions under the consent orders covering false claims about what their ad tools can do, how voice data is collected and used, the nature of consumer consent, and the accuracy of location-based targeting. The settlement money will be used to provide refunds to affected CMG customers. The proposed orders are subject to a 30-day public comment period before the FTC decides whether to make them final.
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