InMobi Settles FTC Charges over Deceptive Tracking of Consumer Locations

The company will have to pay $950,000 in penalties and institute a revamped privacy program

InMobi Settles FTC Charges over Deceptive Tracking of Consumer Locations
Image: Pixabay
June 22, 2016

The operation of a covert tracking program has come with a steep cost for a Singapore-based mobile advertising company.

InMobi has agreed to settle Federal Trade Commission (FTC) charges that it tracked the locations of hundreds of millions of consumers (including children) without their knowledge or consent. The company will pay $950,000 in civil penalties and implement a comprehensive privacy program.

"InMobi tracked the locations of hundreds of millions of consumers, including children, without their consent, in many cases totally ignoring consumers' express privacy preferences," said Jessica Rich in a written statement. Rich is the Director of the FTC's Bureau of Consumer Protection. "This settlement ensures that InMobi will honor consumers' privacy choices in the future, and will be held accountable for keeping their privacy promises."

According to the FTC complaint, InMobi misrepresented that its advertising software would only track consumers' locations when they opted in. However, the company was actually tracking consumers' locations whether or not the apps using InMobi's software asked for consumers' permission to do so. Some users were even tracked after denying permission to access location information.

The company created a database built on information collected from consumers based on access to their geolocation information, combining that data with the wireless networks they were near to document the physical location of wireless networks themselves.

InMobi operated an advertising network that reaches more than one billion devices worldwide through thousands of popular apps. It offered multiple forms of location-based advertising to prospective clients, including the ability to serve ads to consumers based on their current locations, locations they visit at certain times, and on their location over time.

The FTC alleges that InMobi also violated the Children's Online Privacy Protection Act (COPPA) by collecting information from apps that were clearly directed at children.

Under the terms of the settlement, InMobi is subject to a $4 million civil penalty which is suspended to $950,000 based on the company's financial condition. The company is required to delete all information it collected from consumers and will be prohibited from collecting location information in the future without affirmative express consent.

In addition, the settlement requires InMobi to institute a comprehensive privacy program that will be independently audited every two years for the next 20 years.