AppLovin has another controversy to deal with.
San Diego County has sued the mobile adtech giant, alleging it bypassed parental controls to collect data from children’s devices and serve ads for adult dating services, alcohol, vaping products and sexually explicit content in games played by kids.
According to Bloomberg, the complaint alleges AppLovin used device fingerprinting to track children even when parental controls and ad-tracking opt-outs were enabled. AppLovin’s policies, of course, prohibit collecting children’s data or knowingly serving ads to children.
Why This Matters:
Add this to the growing list of controversies AppLovin has had to navigate over the past year-plus.
To be fair, not all of them have been convincing. AppLovin has been targeted by conflicted short sellers, faced allegations from some unusual corners of the internet, and was reportedly investigated by the SEC, which ended without an enforcement recommendation. It’s also locked in a legal battle with Unity. But either way you cut it, allegations involving sexually explicit ads served to children are difficult to brush aside.
The lawsuit is also damaging because the allegations hit on broader concerns about the mobile ad ecosystem. Complaints about questionable ad experiences, questionable apps and limited visibility are common. This forces more questions about what exactly is happening between advertisers, adtech platforms, app developers and users.
Experts React:
On X, Lutiq CEO Colin Behr pushed back on the idea that AppLovin itself is serving the ads cited in the lawsuit.
“AppLovin very clearly doesn’t serve these ads,” Behr wrote, arguing that other companies bidding on inventory within AppLovin’s auctions are more likely responsible. “There’s just no point taking a few thousand or even million bucks and risking the whole business.”
Our Take:
Whatever you make of the individual allegations and controversies surrounding AppLovin, the accumulation of them matters. Investors appear to be feeling some of that pressure. AppLovin shares are down roughly 54% year to date.
For a business that became one of adtech’s biggest success stories, AppLovin often feels like it’s spending an lot of time playing defense.
