U.S. SEC investigates AppLovin over data collection

The U.S. Securities and Exchange Commission is investigating AppLovin’s data collection practices following allegations that it violated service agreements to serve targeted adverts to users.

As reported by Bloomberg, the SEC’s investigation assigned cyber and emerging tech specialists to investigate the company following reports from a whistleblower and “multiple” short-seller reports. It’s unclear how advanced the investigation is, but the regulator has not accused AppLovin of any wrongdoing at this time.

“Reports from Fuzzy Panda and Muddy Waters Research accused AppLovin of abusing its position within the mobile advertising ecosystem to harvest proprietary identifiers from other platforms in an unauthorized manner to track users across different websites and apps and retarget them with advertising,” Bloomberg stated. “This so-called fingerprinting is prohibited by Apple’s App Store and was barred by Google until a February policy change.”

Culper Research also alleged AppLovin exploited “app permissions that enable advertisements themselves to force-feed silent, backdoor app installations directly onto users’ phones.”

AppLovin has declined to comment, telling Bloomberg: “We regularly engage with regulators and if we get inquiries we address them in the ordinary course. Material developments, if any, would be disclosed through the appropriate public channels.” It previously claimed the short reports were “littered with inaccuracies.”

Similarly, the SEC also didn’t comment, stating that “during the [U.S.-wide governmental] shutdown, the SEC’s public affairs office is not able to respond to many inquiries from the press.”

AppLovin’s shares dropped 14% overnight.