AppLovin Faces SEC Probe Over Alleged Data Misuse

The US Securities and Exchange Commission has launched an investigation into AppLovin's data collection practices, following claims that the company violated service agreements to serve targeted advertisements to users. According to a report by Bloomberg, the SEC's investigation involves cyber and emerging tech specialists, who are looking into allegations made by a whistleblower and multiple short-seller reports. At this point, the regulator has not made any accusations of wrongdoing against AppLovin. The allegations, as reported by Bloomberg, include claims by Fuzzy Panda and Muddy Waters Research that AppLovin abused its position in the mobile advertising ecosystem to harvest proprietary identifiers from other platforms without authorization, in order to track users across different websites and apps and retarget them with ads. This practice, known as fingerprinting, is prohibited by Apple's App Store and was previously barred by Google. Culper Research has also made claims that AppLovin exploited app permissions to force-feed silent, backdoor app installations onto users' phones. AppLovin has declined to comment on the allegations, stating that it regularly engages with regulators and addresses inquiries in the ordinary course. The company has previously dismissed the short reports as 'littered with inaccuracies.' The SEC has also declined to comment, citing the US-wide governmental shutdown. As a result of the investigation, AppLovin's shares have dropped by 14% overnight.