Mobile Advertiser Fined for Secretly Tracking Millions of Consumers

Photo (cc) by Karmalize

A mobile advertising firm is in hot water with the Federal Trade Commission for allegedly illegally tracking the location of hundreds of millions of consumers, including children, so it could deliver geo-targeted advertising.

To settle the FTC charges that it violated federal law by tracking consumers without their consent, Singapore-based InMobi has been ordered to pay $950,000 in civil penalties and implement a privacy program.

According to the FTC, InMobi’s software used Wi-Fi signals to determine consumers’ whereabouts, regardless of whether or not the consumers provided opt-in consent for the company to collect their geographical location. Says the FTC:

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.

InMobi’s advertising network encompasses more than 1 billion devices across the globe. The company competes for mobile ads with both Facebook and Google.

Because InMobi collected geographical information from many apps that were directed at children, the FTC alleges that InMobi is also in violation of the Children’s Online Privacy Protection Act (COPPA).

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

Although the actual terms of the settlement with the FTC requires that InMobi pay a $4 million penalty, because of the company’s “financial condition,” the FTC is only forcing it to pay $950,000. The privacy program InMobi creates is also subject to a 20-year oversight period by the FTC.

What do you think of InMobi’s settlement with the FTC? Does it go far enough? Sound off below or on our Facebook page.

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