Pandoras Box: Smartphone Apps Fraud Probe Opens Up, Google & Apple To Be Investigated

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Pandora Media, Apple and Google are being investigated by US authorities over suspected info sharing apps.

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The Federal probe into smartphone apps centres on whether information supplied by users is being misappropriated and if prior permission was sought.

However, US online streaming giant Pandrora, who this week announced it was issued with a subpoena, has said it is  “not a specific target of the investigation” but probably part of an industry wide probe into the apps business, according to the Wall Street Journal.

Pandora provides apps for both Android and Apple users and apps companies have been previously known to transmit user information and location to external companies for ad purposes.

Read Smartphone Apps Keeps Tabs On Users here
 
And the music giant is not alone. Apple and Google have also been asked to submit more detailed information on their apps and individual app makers, reports indicate.

However, neither company has made any comment on the matter.

A previous investigation by the WSJ found personal data is shared “widely and regularly,” by 101 widely used smartphone apps, which showed that over half transmitted the phone’s unique device ID to other companies without users’ awareness.

The iPhone’s TextPlus 4, was revealed to be a major feeder of information to outsiders as was the Angry Birds game and music software Shazam, inbuilt on the Apple device.

The gaming craze Angry Birds is expected to make developers Rovio $1 million per month in advertising revenues by the end of this year.

 

Apple also holds an 8.4 percent share of the mobile ads market, worth $877m according to IDC.

And Steve Jobs’ giant is not alone.

Google accounts for 59 percent of all mobile advertising revenue, meaning if companies are found in violation of fraud rules it could hit their bottom line hard. Mobile ads are said to be worth $1bn for the search giant.

It is understood the US Federal investigation is trying to ascertain whether or not the use of such personal information by third parties violates computer fraud law.

This isn’t the first time the US government has gone after the technology industry.

Last year it was debating the creation of laws for a “Do Not Track Me” mechanism is needed to protect consumer’s privacy online.

 

The apps industry is a highly lucrative one – this year, the mobile advertising market in the U.S. alone may be worth $2 billion.

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