The United States’ Federal Trade Commision (FTC) has fined mobile advertiser InMobi $950,000 for tracking locations of hundreds of millions of consumers, including children, without their knowledge or consent to serve them geo-targeted advertising. This was first reported by the Economic Times.

The FTC said that InMobi is actually subject to a $4 million civil penalty, which it suspended to $950,000 based on the “company’s financial condition.”

The FTC contends the fact that InMobi’s advertising software would only track consumers’ locations when they opted in and in a manner consistent with their device’s privacy settings. However, InMobi was actually tracking locations even when consumers had denied permission to do so.

It further added that InMobi made a database from a user’s geolocation (for which they had consented to) and combined that data with wireless networks they were near to document the physical location of wireless networks themselves. 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 (basically cell phone triangulation).

Children’s Online Privacy Protections Act violations

The FTC also alleged that InMobi violated the Children’s Online Privacy Protection Act (COPPA) and tracked location in thousands of child-directed apps with hundreds of millions of users without following the steps required by COPPA to get a parent or guardian’s consent to collect and use a child’s personal information.

The ET report adds that during the investigation, InMobi discovered that there was a technical error at their end that led to the process not being correctly implemented in all cases. InMobi notified the FTC of this issue as soon as it was discovered and has made it clear that this was by no way means deliberate.

The settlement

As part of its settlement, InMobi is required to:

– To honour consumers’ location privacy settings and are prohibited from collecting location information without their affirmative express consent for it to be collected.

– Delete the location information of consumers it collected without their consent and will be prohibited from further misrepresenting its privacy practices.

– Delete all information it collected from children, and will be prohibited from further violations of COPPA.

– Institute a comprehensive privacy program that will be independently audited every two years for the next 20 years.

The full complaint can be read here.