This Wednesday, mobile advertising company InMobi Pte Ltd. (“InMobi”) agreed to pay $950,000 to settle a Federal Trade Commission (“Commission” or “FTC”) lawsuit filed in connection with InMobi’s geo-targeting and children’s privacy practices.

How do FTC regulations affect mobile marketers using geo-targeting or the personal information of children?

InMobi Advertising Platform and Geo-Targeting Products

InMobi provides an advertising platform for Android and iOS mobile applications. The InMobi platform allows developers to monetize their apps by displaying a variety of third-party advertisements. By February 2015, InMobi advertisements had reportedly reached over a billion unique mobile devices, with 6 billion ad requests served per day.

InMobi offers several geo-targeting products, which can target consumers based on their physical location. According to court records filed by the FTC, even when a consumer restricted mobile application access to his or her current location, InMobi still allegedly tracked the consumer’s location – and, in many instances, served geo-targeted ads – by collecting information about the WiFi networks that the consumer’s device connected to or detected.

FTC Geo-Targeting and COPPA Lawsuit

On June 22, 2016, the Commission sued InMobi in the U.S. District Court for the Northern District of California in San Francisco (Case No. 3:16-cv-03474) for alleged violations of the FTC Act and the Commission’s Children’s Online Privacy Protection Act (“COPPA”) Rule. The lawsuit claims that InMobi geo-targeted consumers who had not provided access to the Android and iOS location APIs or otherwise provided opt-in consent, despite allegedly making representations that InMobi did not collect information from consumers who had not opted in.

Additionally, the Commission’s complaint alleges that InMobi unlawfully collected and used personal information from mobile applications directed to children without providing proper notice or obtaining verifiable parental consent.

FTC Settles Claims Against InMobi

Also on June 22, 2016, the Commission and InMobi reached an agreement settling the FTC’s deceptive advertising and COPPA Rule claims. Under the terms of the agreement, InMobi has agreed to establish, implement and maintain a comprehensive privacy program, and is forbidden from:

  • collecting or maintaining personal information from children in violation of the FTC’s COPPA Rule; and
  • engaging in consumer geo-targeting unless each such consumer has consented to the collection of location information.

InMobi has also agreed to pay the Commission $950,000 to redress consumer injuries. In the event that InMobi misstated or failed to disclose any material financial assets to the FTC, the amount due will balloon to $4 million.

Protect Yourself

When implemented effectively, geo-targeting can be an especially effective marketing practice. However, as the above-referenced case illustrates, federal and state regulators strongly scrutinize policies concerning the collection, use and sharing of consumer information. As such, operators in this space should work closely with experienced privacy counsel to conduct regular reviews of their consumer data privacy protocols and maintain up-to-date consumer privacy policies.