Dive Brief:

• The Federal Trade Commission and Singapore-based mobile ad firm InMobi came to a settlement after the firm was caught secretly tracking the locations of hundreds of millions of users, including children, for the purpose of serving them with geo-targeting advertising.
• The case was the FTC’s first action against a mobile ad network. The settlement consists of a $950,000 civil penalty plus implementation of a comprehensive privacy policy.
• InMobi advertised that its software would only track users’ location after an opt-in consistent with those devices' privacy settings, but the FTC contended InMobi’s software tracked users’ locations even when consumers specifically denied permission.

Dive Insight:

As online advertising grows its share of advertising dollars, regulators are turning their scrutiny to some of the more questionable practices. This was the FTC's first case against a mobile ad network. Other recent actions by the FTC include a settlement with Lord & Taylor over native ad disclosures, and another with Volkswagen over deceptive ads related to the car maker’s clean diesel scandal.

Beyond the illegal location tracking, the FTC contended that InMobi also violated the Children’s Online Privacy Protection Act (COPPA) by allowing its software to track the locations of users in thousands of child-directed apps without following COPPA-required steps to get parent or guardian consent to collect and use a child’s personal information.

“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, 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.”