Privacy Group Claims Hotspot Shield is Spying on Users’ Browsing Habits

Businessman on blurred background using hotspot
Leading VPN provider Hotspot Shield is accused of monitoring and selling users’ data to outside companies to generate increasing revenue.

Hotspot Shield, a free virtual private network provider, was recently accused of allegedly performing deceptive trade practices.

The complaint is sourced from the Center for Democracy & Technology (CDT), which is a prominent nonprofit privacy group that deals in consumer privacy rights.

CDT has issued a 14-page filing requesting the Federal Trade Commission to investigate Hotspot Shield for executing deceptive trade practices.

Among the main allegations in the filing, CDT alleges that Hotspot Shield has been deceiving its consumers by redirecting web traffic to sites they have a partnership with, such as advertising companies.

What is Hotspot Shield?

Hotspot Shield is a leading VPN service provider that has more than 500 million users worldwide. The service allows users to bypass censorship across state and even regional limitations, so they can freely access online platforms such as streaming websites.

According to David Gorodynasky, the CEO of Hotspot Shield’s parent company, nearly 97 percent of the VPN’s users utilize the free version, which collects revenue from ads rather than a subscription model.

Gorodynasky also stated that Hotspot Shield doesn’t gain any money from obtaining customers’ data and instead goes for an approach of making sure the government is not able to request any user data, due to the fact Hotspot supposedly doesn’t collect any in the first place.

However, the CDT claims these statements are untrue and that the company actually keeps logs of customer data and uses third-party tracking programs to enable targeted advertising.

Inside the CDT Allegations

According to CDT, Hotspot Shield has engaged in logging practices involving users’ connection data, excluding their troubleshooting services.

They claim that the popular VPN provider logs users’ locations and IP addresses for advertisement optimization to collect additional revenue. In the complaint to the Federal Trade Commission, CDT alleges Hotspot Shield is deceiving its user base when carrying out these activities.

Some Background on the Case

The case against Hotspot Shield first began in April after the U.S. Congress revoked a law regarding broadband privacy rules, which was made to prevent internet service providers from selling personal information about users to third-party companies.

These rules were first implemented by the previous Obama administration, but the Republican-led House voted in favor of repealing them.

Blue background with Hotspot Hacker
Hotspot Shield has engaged in logging practices involving users’ connection data, excluding their troubleshooting services.

The decision to repeal the law received opposition and concern from various groups, as they were afraid that major internet providers would be able to abuse the personal information given by their users in order to collect additional revenue.

Personal information in this case would include the financial status of the users, as well as details about what potential products or services they might look for. This information can be sold to advertising companies who will be able to target these users with promotional campaigns and ads for customer conversion.

Those who supported the repeal have stated that it is good for business, as it allows companies to generate additional revenue, and therefore helps bring profits which ultimately helps the economy.

Once the repeal took place, there was a great demand for VPN services, as they help protect internet users’ privacy. The increase in demand ultimately led to CDT looking into major VPN providers like Hotspot Shield to see if any malpractices were taking place.

In their investigation, they found evidence to support the claim that Hotspot Shield is using customers’ data to boost company revenue. According to CDT’s filing, the VPN service provider utilizes an encrypted connection to send sensitive user data.

People often use VPN software to mask online crime that takes place worldwide. The last few years have seen a large number of cyber attacks occurring all over the world, prompting people to be more security-conscious when it comes to their digital data.

VPN services allow users to browse online content anonymously, and most users do not trust their network to safeguard their personal information or their browsing habits.

Although CDT has stated its argument and provided the accompanying evidence to support it, Gorodynasky has countered by saying he opposes the claims and that Hotspot Shield has never collected nor abused sensitive user information for their own gain.

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