In April 2017, the Massachusetts Attorney General reached a settlement with Copley Advertising (Copley) regarding geofencing advertising practices near medical facilities in Massachusetts. The settlement is believed to be the first case in which a consumer protection law was asserted against geofencing.

Geofencing is the practice of identifying internet-enabled devices, such as smart phones, as they enter or exit a geographic area. Copley provides geofencing advertising services to its clients. Devices can be identified using information stored on the device, including:

In 2015, Copley contracted with Bethany Christian Services (Bethany), a pregnancy counseling and adoption agency, to provide geofencing services. These services included geofencing medical facilities, including women's reproductive health clinics, in New York, Ohio, Virginia, Missouri, and Pennsylvania. Once Copley had identified an "abortion-minded" woman within a geofenced location they would send advertisements for Bethany to the consumer's phone using mobile applications accessed by the consumer. Once tagged, these consumers were sent ads for up to 30 days.

Though Copley has never geofenced women's health clinics in Massachusetts on Bethany's behalf, the company's CEO, John Flynn, has stated that Copley has the ability to tag smartphones entering or leaving nearly every Planned Parenthood clinic in the US.

The Massachusetts Consumer Protection Act makes it unlawful to engage in unfair or deceptive acts or practices through trade or commerce (M.G.L.A. 93A § 2). The law also permits the Attorney General to pursue an Assurance of Discontinuance from entities how are or are alleged to have been engaged in unfair or deceptive acts or practices (M.G.L.A. 93A § 5). The Massachusetts Attorney General determined that Copley's geofencing activity for Bethany would constitute an unfair or deceptive act or practice in violation of the law. Specifically, Massachusetts is concerned that the practice would:

Massachusetts sought assurances from Copley and its CEO that the company would not engage in these geofencing activities in Massachusetts

In an Assurance of Discontinuance filed in April 2017, Copley and its CEO agreed to refrain from geofencing within a vicinity of 250 feet any medical center in Massachusetts to infer the health status, medical condition, or treatment of any person. In a statement on the settlement, the Attorney General emphasized the importance of protecting consumers from interference or harassment when they are seeking medical care. Specifically, the AG noted that consumers have a right:

Although this agreement only covers the activities of one company in one state, and deals specifically with medical privacy, there are implications for any US company engaged in geofencing advertisements. The Massachusetts Attorney General's decision to act preemptively in the Copley case indicates that they plan to closely watch geofencing activity in the state, at least with regards to the health care arena. Other states may follow suit.

Companies should:

For more information on the regulation of direct marketing activity, see Practice Note, Direct Marketing. For more information on online advertising and marketing, see Practice Note, Online Advertising and Marketing. For information on consumer protection laws in the US more generally, see Practice Note, Consumer Protection: Overview.