Indian based company, InMobi, which is one of the largest mobile ad networks, has recently agreed to a settlement in a case which claimed that they were tracking the location of app uses without first getting consent. They are not admitting to or denying the allegations, but simply agreeing to pay $950,000 to settle the case with the FTC — which has been reported to be “very angry” with InMobi and similar companies that refuse to follow the rules.
They were accused of tracking the location of users, including children, which violates a variety of regulations including COPPA. To make matters worse for InMobi, it appears that they not only didn’t always ask permission to use location tracking, in some cases even when the permission was asked for and rejected, they still tracked the user’s location.
Rather than simply using the GPS location data, the network would use location tracking by identifying WiFi information that mobile devices picked up. Phones and other mobile devices are regularly scanning for WiFi connections, even if they don’t connect. In larger cities, this type of information can provide a very accurate location of the user.
InMobi sent advertising to more than a billion app users, and direct ads in large part by using the location of users.
The FTC compliaint says, “Defendant’s practices undermined consumers’ ability to make informed decisions about their location privacy and to control the collection and use of their location information. Defendant’s practices also deprived consumers of the ability to ensure that they installed and used only those applications that would honor their location privacy.”
“What happened here is a wake-up call for regulators,” said Allison Fitzpatrick, attorney at Davis & Gilbert LLP. “They looked at an ad network and they did not like what they saw. I’d even say it made them angry.”
In regards to the accusation that InMobi was gathering children’s data too, in violation of COPPA, InMobi found that this was actually caused by a technical error that made their process of not tracking apps identified as COPPA apps.
Jessica Rich, the Director of the FTC’s Bureau of Consumer Protection said, “This settlement ensures that InMobi will honor consumers’ privacy choices in the future, and will be held accountable for keeping their privacy promises.”
The original penalty was going to be $4 Million but that amount was reduced to $950,000 due to the financial standings of the company, which are reported to be not doing so well. Despite numerous investments from major firms, the fact they couldn’t pay the $4 million fine should concern anyone working with them.
