Foursquare Profits by Selling Consumers' Geolocation Data Using 'Spyware,' Says Suit

Location technology platform Foursquare gathers “vast amounts of time-stamped, precise geolocation data” from consumers’ cellphones, then profits by selling their data to other companies, said a Monday privacy class action (docket 3:23-cv-30078) in U.S. District Court for Massachusetts in Springfield.

Foursquare collects location data from cellphones using Movement SDK, “spyware” that’s pre-installed on third-party mobile apps including Uber, alleged the complaint. The company profits by selling or trading the location data, it said. The “surreptitious collection and sale” of geolocation data violates the FTC Act, which prohibits ““unfair or deceptive acts or practices in or affecting commerce," it said.

Plaintiff Kari Proskin of Pittsfield, Massachusetts, has used the Uber app since 2016, said the complaint. During that time, Foursquare obtained and sold Proskin’s geolocation data, without her consent, along with that of other Uber customers, it said. Proskin seeks injunctive relief and non-restitutionary disgorgement of all profits Foursquare obtained by selling geolocation data of Massachusetts residents.

Some of the apps that use location data sell or share that data with companies that analyze it and sell their insights, said the complaint, citing real estate firms, hedge funds and retailers, which use the data for their own advertising, analytics, investment strategy or marketing purposes. As a result, “companies that most people have never heard of are hawking access to the location history on consumers’ mobile phones,” the complaint said, referencing a $16 billion market for location data.

Companies in the location data industry “rely on the fact that the general public, legislators, and most government agencies are not paying attention to what these companies are doing,” said the complaint. Geolocation data “can be traced back to a person, and for obvious reasons, is much more valuable and useful to marketers when it is,” it said. “Hyper-contextual,” time-stamped data collected by Foursquare’s Pilgrim SDK, renamed “Movement SDK,” allow the company to offer services as a “third-party enterprise tool” that uses GPS, cellular networks, Wi-Fi, Bluetooth, a phone’s accelerometer and time-of-day data to provide location data, said the complaint. “It can even capture ‘precise visits’ in larger venues such as malls and airports,” it said.

More than 125,000 developers worldwide have embedded Foursquare’s SDK into their apps. The company’s primary source of revenue is the collection and sale of geolocation data, which generates “well over $100 million a year,” said the complaint.

Foursquare collects mobile advertising identifiers (MAIDs) that can easily be linked to the names and home addresses of people associated with the identifier, it said. MAIDs don’t protect a phone user’s identity, said the complaint. Data brokers in the geolocation data industry advertise services to match MAIDs with offline information, such as consumers’ names and physical addresses, it said. Companies in the industry use “vague euphemisms or jargon to describe their product, including ‘identity resolution’ and ‘identity graph,’” the complaint said. Deanonymized geolocation data is more valuable to advertisers than anonymized data, it said.

Uber’s privacy notice “falsely implies" the geolocation data it uses "is only collected and shared for app functionality, or matters related to the ride service,” such as to navigate rider pickups, said the complaint. Uber also says location data is used to match drivers and delivery persons to users requesting services and could be used to prevent or detect fraud perpetrated in connection with Uber’s ride-sharing services, it said. “Uber does not tell users that their geolocation data will be distributed and monetized within the shadowy multibillion-dollar market for cell phone location data,” the complaint said.

Proskin charges Foursquare with unjust enrichment and violation of the Massachusetts Unfair and Deceptive Business Practices Act. She seeks compensatory, statutory and punitive damages, prejudgment interest on all amounts awarded, an order of restitution and other forms of equitable monetary relief and an order enjoining Foursquare from continuing the illegal practices alleged, plus attorneys’ fees and legal costs. Foursquare didn't comment.