Is your phone listening? Marketing firm confirms tech behind targeted ads

The fine print in terms of use agreements, which most users do not read in detail, often contains clauses that permit such invasive practices

For years, people have noticed advertisements for products they recently discussed in conversation—even without searching for them online—suddenly appear on their devices. While many dismissed this as a coincidence or attributed it to targeted advertising based on online searches, it turns out there’s more to the story. According to a report by 404 Media, a marketing firm has confirmed that smartphones are not just tracking users' online activity—they are also listening to what you say out loud, near your phone.

Smartphones might indeed be listening to our conversations, thanks to a technology known as “active listening.” This unsettling discovery comes after a marketing firm, whose clients include tech giants like Google and Facebook, admitted to using software that monitors users’ conversations through the microphones of their devices. This admission has raised serious questions about privacy, user consent, and the ethics of targeted advertising.

How are phones listening to user conversations?

According to the report, Cox Media Group (CMG), a major player in the media industry, has developed technology that can listen to and analyse ambient conversations through the microphones in smartphones, smart TVs, and other devices.

This technology, called “Active Listening,” uses artificial intelligence (AI) to collect real-time data on what users might be considering purchasing. By analysing conversations, the software can identify potential customers and deliver ads that align with their spoken intentions.

How does the 'active listening' tech work?

The 'active listening' technology works by combining voice data—captured from everyday conversations—with behavioural data gathered from users’ online activities. According to marketing materials reviewed by 404 Media, CMG claims that this powerful combination allows advertisers to target consumers more precisely than ever before. For instance, if you discuss purchasing a new car with a friend or joining a gym, this conversation could be intercepted by the active listening technology, which then triggers related ads on your devices.

The extent of this practice became clear when CMG presented its technology to investors, revealing that it could capture and analyse behavioural and voice data from over 470 sources. This allows advertisers to gain deeper insights into consumer intentions and behaviour, going beyond traditional online tracking methods.

What does this mean for users?

One of the most troubling aspects of this revelation is how easily users may have unknowingly consented to being monitored. CMG reportedly claimed in a now-deleted statement that users agree to active listening every time they download a new app or update an existing one.

The fine print in the terms of use agreements, which most users do not read in detail, often contains clauses that permit such invasive practices. This allows the technology to be deployed without explicit, informed consent, raising serious ethical and legal concerns.

Intrusive data collection practices

The revelation about active listening is part of a larger trend of intrusive data collection practices. This is the third time in a year that 404 Media has exposed the questionable activities surrounding this technology. In a previous report from December, the media outlet revealed how CMG had been promoting this invasive technology through its podcast, while simultaneously keeping its capabilities largely hidden from the public eye.

Is this even legal?

Data protection laws around the world vary in how targeted advertisements are treated. At most, laws ensure that processing of personal data is done in a transparent and secure manner.

The European Union's General Data Protection Regulation (GDPR) is perhaps one of the most stringent data protection laws drafted to date, under which organisations must obtain explicit and informed consent from individuals before processing their personal data for targeted ads. This includes the use of cookies and tracking technologies. Under GDPR, organisations must be transparent about how personal data is collected, used, and shared for targeted ads.

In the United States, the California Consumer Privacy Act (CCPA) gives users the option to opt out of the sale of their personal data to third parties, which is often related to targeted advertising. Consumers also have the right to know what personal data is being collected and how it is used.

In India, the data protection laws ensure there is consumer consent for the use of data in targeted ads and give individuals the option to opt out of these practices.

However, despite these laws being in place, most people do not read through terms and conditions or "the fine print" before agreeing to share their data. It is almost too easy to impatiently click the "Accept All Cookies" button on devices to access desired sites and apps.

As quoted by the New York Post, CMG's (deleted) statement reportedly said, "We know what you're thinking. Is this even legal? It is legal for phones and devices to listen to you. When a new app download or update prompts consumers with a multi-page term of use agreement somewhere in the fine print, Active Listening is often included."

Google, Meta and Amazon response

The technology drew scrutiny from some of CMG's biggest clients. After the report emerged, Google removed CMG from its “Partners Programme” website and stated that all advertisers must comply with laws and regulations, adding that any violation of its policies would lead to appropriate action.

Meta, the parent company of Facebook and Instagram, responded to queries by the Post, saying it was reviewing whether CMG’s technology had violated its terms of service, reiterating that it does not use users' phone microphones for ad targeting.

Amazon, another major client, has also reportedly denied any involvement with CMG’s programme and warned that it would take legal action against any partner found to be breaching its rules.

These revelations remind users of the importance of understanding the terms and conditions people agree to when using devices and digital services. It also highlights the need for greater transparency and regulation in the technology and advertising sectors to protect consumers from intrusive surveillance, a topic that has sparked widespread debate in the last few years.