Location-based advertising allows companies to better target consumers with ads that make the most sense for them. However, tracking the location of someone without their permission is a big no-no. Just ask InMobi which must pay $950,000 and revamp its services to resolve federal regulators’ claims that it deceptively tracked locations of hundreds of millions of people, including children. 

The Federal Trade Commission announced Wednesday that it had reached a settlement agreement with Singapore-based mobile advertising company InMobi over accusations the company tracked the locations of people and provided geo-targeted ads without their knowledge or consent.

InMobi, which describes itself as the “world’s largest independent mobile advertising company,” provides an advertising platform for mobile application developers and advertisers. Among its services, InMobi offers several geo-targeting products through which advertisers can target consumer based on their physical location — past and present.

According to the FTC complaint [PDF], InMobi misrepresented that its advertising software would only track consumers’ locations when they opted-in and in a manner inconsistent with their device’s privacy settings.

In reality, the FTC claims that until December 2015, InMobi was tracking consumers’ locations whether or not the apps using InMobi’s software asked for consumers’ permission to do so, and even when users had denied permission to access their location information.

In order to track these users, InMobi created a database of information on customers and combined that data with the wireless networks they were near to document the physical location of wireless networks themselves.

The company then used that database to infer the physical location of consumers based on the networks they were near, even when owners had turned off location collection on their device.

What’s more, the FTC alleges that this tracking wasn’t confined to apps for adults, but also those intended for children, constituting a violation of the Children’s Online Privacy Protection Act (COPPA).

Under the settlement, InMobi is subject to a $4 million civil penalty, which is suspended to $950,000 based on the company’s financial condition.

InMobi must also delete the location information it collected from users without consent, and will be prohibited from further misrepresenting its privacy practices.

The settlement also stipulates that InMobi institute a comprehensive privacy program that will be independently audited every two years for the next 20 years.

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