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FTC Settles With Mobile Ad Platform Tapjoy For Misleading In-Game Rewards

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The Federal Trade Commission (FTC) has reached a settlement with California-based mobile advertising platform Tapjoy for alleged failure to provide in-game rewards users were promised for completing advertising offers.

Tapjoy operates an advertising platform that works within mobile games by promising in-game virtual currency such as gold bars or diamonds, to users who complete activities. These activities would appear on an "offerwall" where Tapjoy displays third-party advertisements. Tapjoy earns commissions from third-party advertisers.

The activities include purchasing a product, signing up for a free-trial offer, providing personal information, or taking a survey. While completing some of these activities, consumers also ended up revealing sensitive personal information, such as their medical history or contact information.

Mobile offerwalls are in-app advertising units that monetize users through rewarded engagements. Users access the offerwall at key moments in gameplay, often through the app's store or a contextual message.

The FTC alleges that Tapjoy deceived consumers by failing to provide the reward it promised even after consumers completed the activities on the offerwalls. Tapjoy had also promised gamers in-app rewards for completing advertising offers made by its partners.

Tapjoy promised consumers that, by completing the instructions associated with these advertisements, consumers could "earn" their in-game rewards, according to the complaint. It cheated developers and gamers out of promised compensation and rewards.

The company also allegedly failed to address the hundreds of thousands of complaints from consumers who said they never received their promised rewards, despite completing the activities and spending a significant amount of money to complete some of them.

Though Tapjoy was aware of these issues, they did not take adequate steps to address them or stop making deceptive claims. They also went on to implement policies to discourage consumers from complaining, such as prohibiting consumers from submitting a complaint within 24 hours of completing an offer.

According to the proposed settlement, the FTC has prohibited Tapjoy from misleading users about the rewards they can earn. They must also monitor its third-party advertiser partners to ensure a following through on promised rewards, investigate complaints from consumers, and discipline advertisers who deceive consumers.

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