SEC Charges App Annie With Securities Fraud in $10 Million Settlement

Issie Lapowsky, Protocol:

The Securities and Exchange Commission announced Tuesday that it’s charging App Annie, the mobile app data provider, with securities fraud, accusing the company of “engaging in deceptive practices” and misrepresenting the origins of its data. App Annie will pay a $10 million settlement, according to the announcement, although the company has not admitted to any of the SEC’s findings.

The ability for companies to settle charges like these without admitting fault is a fascinating piece of legal spin I would love to learn more about. I looked at all of the press releases issued by the SEC since July 1. About one-third of them contained some variation of the phrase “without admitting or denying the SEC’s findings” — including for settlements for inflated income reporting by Kraft Heinz, misreporting a security breach of Pearson, auditing interference by Ernst & Young, and UBS failing to control for risky investments. Allegedly.

We all have to use the word “allegedly” because none of the above companies — including App Annie — admitted guilt, nor were found guilty. They all get to pretend as though they have not broken the law. This settlement process may be less expensive than taking these cases to trial, but the result is that fraud and systemic abuse is treated as a business expense. And remember: these press releases are all from the last ten weeks.

Anyway, all of that is surely beyond the scope of this little website. I wanted to look at that App Annie settlement in more detail and got sidetracked. Here:

[…] The order finds that App Annie and Schmitt understood that companies would only share their confidential app performance data with App Annie if it promised not to disclose their data to third parties, and as a result App Annie and Schmitt assured companies that their data would be aggregated and anonymized before being used by a statistical model to generate estimates of app performance. Contrary to these representations, the order finds that from late 2014 through mid-2018, App Annie used non-aggregated and non-anonymized data to alter its model-generated estimates to make them more valuable to sell to trading firms.

A reminder that App Annie’s data collection practices, like other similar companies, are horrible and creepy.