InMobi to pay $950,000 fine for privacy violation in ad delivery
23 Jun 2016
InMobi, the Indian startup that attracted top investors from the technology industry, has been charged by the US' Federal Trade Commission (FTC), of deceptively tracking the locations of hundreds of millions of consumers – including children – without their knowledge or consent to serve geo-targeted advertisements.
The mobile advertising network would pay $950,000 or Rs6.4 crore in civil penalties and implement a comprehensive privacy programme to settle the charges.
''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 honour consumers' privacy choices in the future, and will be held accountable for keeping their privacy promises.''
InMobi is supported by top investors including Japan's SoftBank, Kleiner Perkins Caufield & Byers and Ram Shriram's Sherpalo Ventures. The company received an investment of $200 million or about Rs1,348 crore from SoftBank in 2011, which helped it become a 'Unicorn' or a start-up with a market cap in excess of $1 billion or Rs6,744 crore.
In July last year, the nine-year-old company launched an artificial intelligence discovery platform, Miip, that was supposed to gross billion-dollar revenues for the company.
The FTC further alleged that InMobi also violated Children's Online Privacy Protection Act (COPPA) by collecting this information from apps that were clearly directed at children, despite promising that it would not do so after it emerged that a technical error had led to delivering ads to customers without their knowledge.
"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. As a result, some COPPA sites were served with interest-based campaigns on the InMobi Network.
InMobi promptly notified the FTC of this issue as soon as it was discovered and has made it clear from the outset that this by no means was deliberate. Any family safe ads that may have formed part of targeted campaigns would have been undertaken to target the adult owner of the device," InMobi said in a statement.
