In what appears to be the first time a consumer protection law was used to object to a company engaging in GPS-based ad targeting, Copley Advertising settled with Massachusetts Attorney General (AG) Martha Healey after she challenged the company's targeting of women near health clinics.

Massachusetts-based Copley was hired by a Christian organization in the spring of 2015 to send antiabortion ads to the smartphones of "abortion-minded women" who were either close to or had entered the waiting rooms of women's health clinics, the AG alleged. Ads featured text such as "You Have Choices," "Pregnancy Help" and "You're Not Alone" that, if clicked on, provided recipients with information about abortion alternatives and an opportunity to engage in a mobile chat with a "pregnancy support specialist."

Copley's use of geofencing—creating a virtual fence around a specified location that is tripped when an individual enters the area with a mobile device—was set at or near reproductive health centers and methadone clinics in Columbus, New York City, Pittsburgh, Richmond and St. Louis, and continued to send targeted ads for up to 30 days.

Although Copley had yet to engage in geofencing campaigns within Massachusetts, the company had the ability to do so and the AG alleged that such a targeted ad campaign would run afoul of Massachusetts's consumer protection law by "tracking a consumer's physical location near or within medical facilities, disclosing that location to third-party advertisers, and targeting the consumer with potentially unwanted advertising based on inferences about his or her private, sensitive, and intimate medical or physical condition, all without the consumer's knowing consent."

To settle the suit, Copley agreed to refrain from using geofencing technology at or near Massachusetts healthcare facilities to infer the health status, medical condition or medical treatment of any individual, according to the Assurance of Discontinuance. However, the company denied any wrongdoing.

"The Massachusetts Attorney General's office singled out Copley Advertising to challenge what we believe was an exercise of free speech under the First Amendment," Copley's owner John Flynn said in a statement. "Although we have not violated any laws, we made an agreement with the AG's office so we can devote our time and resources to working for our clients. Their right to free speech should not be marginalized because government officials do not agree with the message of their advertisement."

To read the Assurance of Discontinuance in In the Matter of Copley Advertising, click here.

Why it matters: "While geofencing can have positive benefits for consumers, it is also a technology that has the potential to digitally harass people and interfere with health privacy," AG Healey said in a statement. "Consumers are entitled to privacy in their medical decisions and conditions. This settlement will help ensure that consumers in Massachusetts do not have to worry about being targeted by advertisers when they seek medical care." The action also sends a message to advertisers to use caution when considering a geofencing ad campaign.