SAN FRANCISCO (CN) — Mobile-advertising giant InMobi has agreed to pay $950,000 to settle charges that it tracked the locations of application users without their consent.
Without admitting to or denying the allegations, InMobi's June 22 settlement resolves a simultaneously filed complaint by the Federal Trade Commission, which accused InMobi of tracking users' locations — including those of children — through apps that use its advertising software.
Such tracking allegedly occurred even when those apps did not request permission. If the apps did request permission and consumers refused to grant it, InMobi logged their location anyway, according to the complaint.
The FTC notes that InMobi's advertising networks span more than a billion app users. San Francisco-based InMobi allows third-party advertisers to target users based on their current location, locations they visit multiple times or at certain times of the day, and their location over a two-month time period.
Regulators say InMobi circumvented users' location privacy preferences and served them geotargeted ads by collecting information from the WiFi networks near or connected to their devices.
When InMobi couldn't identify a user's location based on WiFi information, it would enter that information into a database, which then determined the user's longitude and latitude, the FTC says.
"Defendant's practices undermined consumers' ability to make informed decisions about their location privacy and to control the collection and use of their location information," the FTC's complaint states." Defendant's practices also deprived consumers of the ability to ensure that they installed and used only those applications that would honor their location privacy."
The FTC also accused InMobi of violating the Children's Online Privacy Protection Act (COPPA) by collecting location information from apps meant for kids, and doing so without obtaining permission from their parents. The company had not fully disclosed on its website what information it collected from minors.
InMobi said that it had not intended to target children.
"With best intentions to adhere to COPPA requirements, InMobi implemented a process to exclude any publisher's site or app identified as a COPPA app from interest-based, behavioral advertising," InMobi said in a statement Wednesday. "During the investigation by FTC, InMobi discovered that there was a technical error at InMobi's end that led to the process not being correctly implemented in all cases. ... This was by no means deliberate."
Under the FTC settlement, InMobi will pay $950,000 in civil penalties plus interest over one year. The company was originally subject to a $4 million penalty but that amount was reduced based on its financial standing.
"This settlement ensures that InMobi will honor consumers' privacy choices in the future, and will be held accountable for keeping their privacy promises," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement Wednesday.
InMobi must also obtain users' permission before tracking their location and delete the location data it previously collected without permission. The company has also agreed to delete the information it collected from children and obtain parental approval before collecting information from them going forward.
The settlement also requires InMobi to establish a privacy program and have it independently evaluated every two years for 20 years.
Justice Department attorney Jacqueline Blaesi-Freed did not return phone and email requests for comment Wednesday afternoon.
Tyler Newby, attorney for InMobi, directed Courthouse news to a statement released by InMobi Wednesday.
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