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InMobi penalised $950K by FTC for tracking user location without consent

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In continued blows to the already troubled mobile advertising firm InMobi, the company has now been slapped with close to $1 Million ($950K to be precise) in fine, for illegally tracking its users’ location. The fine has been imposed by the FTC.

According to a report in the ET, Federal Trade Commission found InMobi guilty of infringing upon privacy of millions of users by tracking their locations without consent. As a consequence of that, It has asked the firm to pay a heavy $950K to settle charges against it. Whats interesting though, is the fact that the original penalty was close to $4 Million, but was brought down by the FTC itself, looking at the financial condition of the firm.

FTC has also asked InMobi to establish a comprehensive privacy program. An independent firm will audit this program every 2 years for the next 20 years.

FTC has charged the ad-tech firm for deceptively tracking locations of users including children. The company had reportedly collected information through geo-tagging in mobile apps which use InMobi’s advertising solutions. These apps reportedly tracked locations even after users denied permissions to access their locations. Some apps did not even ask permission to track locations from the users.

In its statement, FTC said,

InMobi created a database built on information collected from consumers who allowed the company 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 then would use that database to infer the physical location of consumers based on the networks they were near, even when consumers had turned off location collection on their device.

FTC has also charged InMobi for violating the Children’s Online Privacy Protection Act (COPPA). Thousands of apps mentioned above “were clearly directed at children, in spite of promising that it did not do so”.  

These apps tracked locations of children without the consent of their parents or guardians. They also collected and used private information of children without permission.

On this investigation and the subsequent fine, Jessica Rich, 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.

InMobi however, is denying these charges. The company said, that it had implemented a process to prevent any COPPA app or website from using internet-based advertising. But that claim proved wrong, when during an FTC investigation, the company found that a technical error did not let the process to implement properly.

The firm had promptly notified FTC regarding the same and has claimed that the error was not deliberate. In a statement given to the ET, the company says,

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.

InMobi also said that it would only use WiFi information when serving location-based targeted advertising campaigns after authorization by the user.

Earlier, the firm used to track user location through the Wifi identifier as part of the SDK integration with publisher apps irrespective of user choice. Interestingly however, FTC did not fine InMobi for this issue.

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