Following a report by mobile app attribution firm Kochava which had uncovered that seven Google Play apps owned by Cheetah Mobile involved ad fraud schemes called click flooding, Cheetah Mobile, the Chinese Internet company announced plans to take legal action against Kochava.
Cheetah Mobile in a press release said that the report provided false information leading to a sharp drop in company stock.
Following testing, the Internet company says it found that Kochava had used questionable practices to test click injection. It cites a statement by Grant Simmons, head of client analytics for Kochava who said that the “fraud detailed in our research […] does not look at in-app ad delivery from the apps in question, but instead the syndication of fraudulent signals taking place on the device when the apps are present”.
Cheetah Mobile responded: “Kochava is giving the erroneous impression that the reports generated by the third-party SDKs are related to Cheetah Mobile’s apps”.
Furthermore, the company said that 97% of its advertising SDKs came from third-parties, although Kochava claimed that the SDK involved in the fraud scheme was owned and developed by Cheetah and not third parties.
However, Cheetah said that attribution was unrelated to its apps.
Cheetah also addressed its investment in Kika Tech, the second company Kochava had uncovered app fraud with.
“Kika Tech is just one of more than 80 companies that the Company has invested in. Cheetah Mobile owns less than a five percent stake in Kika Tech and has no seats on the board. Furthermore, the Company has zero operational control over Kika Tech,” Cheetah said in a statement.
Following the news, the company has taken some extra precautionary steps and removed the Batmobi and Duapps apps after hiring security firm Threat Hunter to take a closer look at the situation. Cheetah added that it would continue to investigate the situation and suspend cooperation with SDKs that could emerge as fraudulent.
“Cheetah Mobile rejects Kochava’s accusations as baseless. The Company will continue to place even more value on advertisers’ rights and making sure the industry develops in a healthy way. As one of the top publishers in the world, Cheetah Mobile pledges to redouble its efforts towards monitoring and detecting potential issues within third-party ad SDKs and its own products in order to ensure maximum benefits for advertisers and users alike.”