SoftBank-backed mobile advertising company InMobi will pay $950,000 in civil penalties and implement a comprehensive privacy program to settle Federal Trade Commission charges it deceptively tracked the locations of hundreds of millions of consumers – including children – without their knowledge or consent to serve them geo-targeted advertising.
Mobile tracking, especially through ad networks, is a highly sensitive topic and the FTC has been paying close attention to the way that companies handle it. Many consumers understand that the apps they’re using on a daily basis are capable of tracking the activities online, but the fact that they also can track users’ movements is not as well-known. Advertisers have a vested interest in knowing where their target consumers are at any given time in order to show them contextual ads and offers. Mobile devices are the perfect platform for location tracking, as most users carry their phones with them nearly all the time.
FTC in a statement noted that under the actual terms of the settlement, InMobi is subject to a $4 million penalty but the agency suspended the fine to $950,000 “based on the company’s financial condition”.
“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 said in a statement.
“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, 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.”