FTC fines InMobi nearly $1M for deceptively tracking users' location

The U.S. Federal Trade Commission said the mobile advertising firm InMobi has agreed to pay $950,000 to settle claims it deceptively tracked mobile users' location without their knowledge.

InMobi monitored the whereabouts of "hundreds of millions of consumers – including children" the FTC alleged, in an effort to serve them location-based ads. The Singapore-based company had claimed that its software would track consumers' location only when they opted in "and in a manner consistent with their device's privacy settings," the FTC said, but did so even when consumers had denied permission.

Locations were tracked via the SDK (software development kit) using Wi-Fi hotspot data, the commission said. InMobi was also accused of violating the Children's Online Privacy Protection Act by tracking the whereabouts of minors.

"The complaint alleges that 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," the FTC said in a press release. "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."

The settlement is roughly one-fourth the $4 million penalty InMobi could have received and may be subject to if it violates terms of the settlement, the FTC said. The company agreed to delete all the data it collected from children as well as the location information it compiled from users who didn't consent to disclose it.

The settlement underscores the ever-increasing tension between consumer privacy and marketers' desires to target specific consumers at the optimal time and place over their phones.

While InMobi may not be a household name, the company is a significant player in mobile advertising. Its network reaches more than 1 billion devices worldwide through thousands of popular apps, the FTC said, and the company can deliver ads based on their current location, sites they visit at specific times and their physical traffic patterns.

InMobi will undergo audits every other year for the next two decades to ensure it adheres to the terms of the settlement.

For more:
- read this FTC press release

Related articles:
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Moody's: FCC's new privacy rules will hurt AT&T and Verizon's chances to compete with Facebook, Google
FCC partners with FTC on inquiry regarding mobile security updates

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