SAN FRANCISCO: InMobi is to pay a near-$1m penalty to settle a case brought against it by the Federal Trade Commission (FTC), which had charged the mobile advertising network with tracking consumers without their consent.

According to the FTC complaint, InMobi was tracking consumers' locations whether or not the apps using InMobi's software asked for consumers' permission to do so, and even when consumers had denied permission to access their location information.

The FTC claimed that InMobi had also violated the Children's Online Privacy Protection Act (COPPA) by collecting this information from apps that were clearly directed at children, in spite of promising that it did not do so.

"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.

"This settlement ensures that InMobi will honour consumers' privacy choices in the future, and will be held accountable for keeping their privacy promises."

In addition to a $950,000 penalty, the company will be required to delete all information it collected from children and the location information of consumers which it collected without their consent.

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

An InMobi spokesperson told Fortune that the collection of children's information had been inadvertent and that the company itself had notified the FTC after discovering a "technical error" which had since been corrected.

In Warc's Programmatic Primer, author Ted McConnell notes that most of the privacy issues for publishers and advertisers centre on what data are collected and how this is used to build consumer profiles.

He advises that specialist privacy companies can help with privacy and regulatory compliance by providing branding 'seal-of-approval' validation, and page-level programming that supports opt-out functionality for consumers.

Data sourced from FTC, Fortune; additional content by Warc staff