The Federal Trade Commission (FTC) announced Thursday that it intends to ban BetterHelp from sharing user data for advertising purposes, bringing renewed attention to BetterHelp data privacy concerns. The regulatory body is also calling for BetterHelp to pay $7.8 million to consumers as part of a settlement over allegations that the virtual mental health provider shared sensitive health information with third parties, including social media platforms and digital advertisers. The proposed settlement and an administrative complaint were approved by the FTC commissioners on a 4-0 vote, with the fifth commissioner concurring. The agreement is now subject to a 30-day public comment period on the Federal Register before it can become final.
BetterHelp, a subsidiary of Teladoc Health Inc. (NYSE: TDOC) based in Purchase, New York, denies wrongdoing. The company stated that it was never paid to share private information such as members’ names or clinical data from therapy sessions. “This industry-standard practice is routinely used by some of the largest health providers, health systems, and healthcare brands,” BetterHelp said in a statement. “Nonetheless, we understand the FTC’s desire to set new precedents around consumer marketing, and we are happy to settle this matter with the agency.”
Despite the company’s defense, the potential ban could significantly affect Teladoc’s marketing strategy, as BetterHelp has relied heavily on advertising to drive growth. BetterHelp is one of the largest virtual mental health providers in the U.S. and a core part of Teladoc’s business. In 2022, BetterHelp generated $1.02 billion in revenue—roughly 42% of Teladoc’s total revenue—and grew paid monthly users to 450,000, a 28% increase year over year. However, Teladoc also reported a net loss of $13.7 billion in 2022, in part due to a 50% increase in advertising and marketing expenses, which totaled $624 million. The company attributed much of the increase to higher digital advertising and member engagement campaigns supporting BetterHelp and its Integrated Care segment.
The FTC’s investigation highlights growing concerns around BetterHelp data privacy and the handling of sensitive information by telehealth companies. In June, several Democratic U.S. senators requested information from BetterHelp and competitor Talkspace Inc. (Nasdaq: TALK) regarding their handling of patient data and partnerships with major tech companies for marketing purposes. Investigative reporting by STAT News and The Markup revealed that dozens of telehealth companies, including behavioral health providers, routinely shared user data with tech and marketing firms.
“When a person struggling with mental health issues reaches out for help, they do so in a moment of vulnerability and with an expectation that professional counseling services will protect their privacy,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “Instead, BetterHelp betrayed consumers’ most personal health information for profit. Let this proposed order be a stout reminder that the FTC will prioritize defending Americans’ sensitive data from illegal exploitation.”
Key Details of the FTC Settlement
The proposed settlement would prohibit BetterHelp from sharing individually identifiable user information with third parties for advertising purposes, addressing longstanding BetterHelp data privacy concerns. It also bans sharing data from previous users, a practice known as retargeting. The FTC alleges that BetterHelp continually violated its privacy policies by sharing and monetizing consumer health information between 2013 and 2020, while BetterHelp contends the settlement pertains to advertising practices from 2017 to 2020.
According to the FTC’s administrative complaint, BetterHelp shared sensitive user data with platforms such as Facebook, Pinterest, Snapchat, and Criteo for research, product development, and targeted marketing. For example, the FTC alleges that BetterHelp disclosed IP and email addresses of approximately 5.6 million visitors to Snapchat for retargeting ads and uploaded over 7 million users’ email addresses to Facebook between 2017 and 2018.
The settlement would require BetterHelp to take several steps to protect consumer privacy and prevent further violations:
- Obtain affirmative, express consent from users before sharing data with third parties for purposes other than advertising
- Inform users who joined before January 1, 2021, that their data may have been disclosed
- Implement a comprehensive privacy program
- Conduct third-party privacy assessments every two years
- Have a company executive certify compliance and report any breaches to the FTC
- Notify the FTC about any organizations with which data was shared without consent and request deletion
These requirements would remain in effect for 20 years following approval of the settlement, reflecting the FTC’s intent to enforce long-term accountability and reinforce BetterHelp data privacy protections.
The Broader Context: Telehealth Growth and Privacy Concerns
The FTC’s action against BetterHelp comes amid heightened scrutiny of telehealth, particularly in the mental health sector. During the COVID-19 pandemic, demand for behavioral health services surged, while restrictions on in-person care limited access to traditional counseling. Telehealth providers, including BetterHelp, quickly became essential for maintaining continuity of care, and billions of dollars of venture capital flowed into the sector to support expansion. Between 2019 and 2021, mental health funding quintupled to $5.1 billion, according to Rock Health, highlighting investor enthusiasm for digital behavioral health platforms.
However, rapid growth also attracted scrutiny. Public scandals involving virtual mental health companies like Cerebral, whose online pharmacy partner TruePill is facing potential DEA sanctions, raised concerns about patient safety, privacy, and compliance. The FTC’s settlement with BetterHelp signals regulators’ intent to monitor telehealth companies closely, particularly regarding BetterHelp data privacy, data handling, and marketing practices.
Implications for Telehealth Providers and Consumers
The BetterHelp settlement serves as a cautionary tale for telehealth companies about the importance of transparency, user consent, and robust privacy policies. Companies must now carefully evaluate marketing strategies, especially those that rely on user data for retargeting or third-party advertising. For consumers, the settlement strengthens the expectation that sensitive health information is safeguarded and used responsibly.
For Teladoc and BetterHelp, the settlement may necessitate shifts in digital marketing strategy, highlighting the tension between growth ambitions and compliance. The case also establishes a precedent for how the FTC may hold virtual mental health providers accountable, ensuring BetterHelp data privacy and similar protections for users across the telehealth industry.
As telehealth continues to expand, the FTC’s actions emphasize that protecting consumer information is a non-negotiable aspect of providing mental health services online. The settlement sets a long-term example of regulatory oversight that could reshape digital marketing and data-sharing practices for years to come.
