InMobi, which delivers geo-targeted mobile advertising, is having to pay a fine of $950,000 in civil penalties and integrate a privacy programme to settle charges from the Federal Trade Commission (FTC) which says it tracked locations of “hundreds of millions of consumers – including children – without their knowledge or consent”.
According to a statement by the FTC, InMobi has actually been ordered to pay a $4m penalty, but based on the company’s financial condition, this has been reduced to $950,000.
InMobi to pay $950,000 in fines
The FTC complaint alleges that InMobi collected tracked consumer locations, combining data from wireless networks and mobile geo-location, without asking permission.
Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, says:
“InMobi tracked the locations of hundreds of millions of consumers, including children, without their consent, in many cases totally ignoring consumers’ express privacy preferences. This settlement ensures that InMobi will honor consumers’ privacy choices in the future, and will be held accountable for keeping their privacy promises.”
The agency said that the company also violated the Children’s Online Privacy Protection Act (COPPA) by collection information from apps aimed at children, despite a promise not to do so. It tracked thousands of kids’ apps with hundreds of millions of users without complying to the necessary steps that are required as part of the COPPA to get a parent’s consent.
The company has been ordered to delete consumer location information that was collected without consent, including all data obtained from children. It will be prohibited from acquiring consumer location data without affirmative express consent and agreed to honor consumer location privacy settings.
InMobi will further be required to establish a comprehensive privacy programme to be audited every two years for the next 20 years.
An InMobi spokesperson explained:
With best intentions to adhere to COPPA requirements, InMobi implemented a process to exclude any publisher’s site or app identified as a COPPA app from interest-based, behavioral advertising. During the investigation by FTC, InMobi discovered that there was a technical error at InMobi’s end that led to the process not being correctly implemented in all cases. As a result, some COPPA sites were served with interest-based campaigns on the InMobi Network. InMobi promptly notified the FTC of this issue as soon as it was discovered and has made it clear from the outset that this was by no way means deliberate. Any family safe ads that may have formed part of targeted campaigns would have been undertaken to target the adult owner of the device.
In certain instances, InMobi has inferred user location through the Wifi identifier as part of the SDK integration with publisher apps without express election by an user. While InMobi was not fined by the FTC for this practice, to implement best practices, going forward InMobi will only use WiFi information when serving location based targeted advertising campaigns when an app user has authorized the app to collect and transmit the same. The errors were corrected in Q4 2015, and since then, InMobi has been fully compliant with all COPPA regulations. InMobi operates across several countries and continents, and intend to adhere to the best practices related to the data and privacy requirements of all the countries.
The settlement doesn’t come at a great time for InMobi as it struggles to raise cash to sustain its business. In April 2016, it laid off 10% of its staff to combat strong competition in the mobile marketing environment.