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FTC Proposes Settlement with Mobile Advertiser That Allegedly Conned Consumers

The sign denoting the Federal Trade Commission's building in Washington.

Washington, D.C., USA - July 19, 2019: This is the exterior view of the street sign in front of the US Federal Trade Commission headquarters. The FTC is the governmental agency tasked with regulating commerce and business practices for the federal government

According to a Federal Trade Commission (FTC) press release published on Thursday, Tapjoy, Inc., a mobile advertising company, has agreed to settle the agency’s case alleging it failed to provide in-game rewards promised to users for completing advertising offers. The FTC formally confronted the company after it reportedly received hundreds of thousands of complaints from users who did not receive the pledged rewards after holding up their end of the bargain.

The press release explained that the California-based defendant’s advertising platform works “within mobile games by promising in-game virtual currency—such as gold bars or diamonds—to users who complete activities including purchasing a product, signing up for a free-trial offer, providing personal information (for example, an email address), or taking a survey.” The FTC alleged that Tapjoy, which earns commissions from third-party advertisement, duped consumers by failing to deliver on the promised rewards.

The FTC further contended that Tapjoy was aware of the problems users experienced and failed to take adequate steps to address their concerns or stop making misleading claims. Instead, the commission said, the company “implemented policies to discourage consumers from complaining, such as prohibiting consumers from submitting a complaint within 24 hours of completing an offer.”

The FTC commissioners’ unanimously agreed upon consent agreement with Tapjoy prohibits it from misleading users about the rewards they are eligible to receive and must monitor third-party advertising partners to ensure that they work with Tapjoy to deliver pledged rewards. After the FTC publishes the agreement in the federal register, a 30-day public comment period will open. Thereafter, the FTC will decide whether to finalize the settlement.

The FTC is represented by its Bureau of Consumer Protection and Tapjoy is represented by Cooley LLP.

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