The Federal Trade Commission announced on Thursday that it has finally reached a settlement with Tapjoy, a California-based adtech company that’s alleged to have defrauded consumers consumers out of the in-app rewards that they were promised. Per the FTC, Tapjoy’s scam had allegedly gone on for “several years,” resulting in “hundreds of thousands” of complaints filed by pissed mobile gamers across the country.
For those unfamiliar, Tapjoy is one of the many, many, many tech players that acts as an intermediary between a given publisher, site, or app and the advertisers looking to reach the eyeballs that are on it. Tapjoy’s specialty was mobile gaming apps, and it pitched mobile game developers to include a tiny piece of Tapjoy’s tech in their apps to monetize the users that downloaded the games.
But instead of playing the typical dreck that you’d see in the mobile ad space, devs partnering with Tapjoy would play “offerwalls” that let these app users complete a specific task—like, say, signing up for a subscription or watching a movie trailer—in exchange for some sort of in-game currency. Advertisers would pay Tapjoy to reach these consumers, and once their ad played, Tapjoy would give a cut to the developer in question.
If you’re a mobile gaming buff, chances are you’ve seen something like this once or twice:
The issue, according to the FTC’s initial complaint, is that Tapjoy would rarely come through on its end of the bargain. The commission alleged that as far back as 2016, Tapjoy realized “too many users [were] simply not getting rewarded.”
“Tapjoy has acknowledged in internal emails that it was ‘not news’ that consumer complaint rates related to offers that purported to request personal information were ‘out of control,’” the complaint reads.
The FTC goes on to say that the personal details that Tapjoy collected included everything from email addresses and phone numbers to “sensitive health information.” In one example, the FTC explained that instead of getting the reward they were promised for entering their emails, app users were bombarded with surveys “that included questions about ‘whether you or a loved one’ had various health conditions, including cancer, diabetes, or arthritis.”
When these people weren’t giving away their data, they were putting down cold, hard cash.
“Magazine subscriptions or video streaming services that require the payment of some amount each week or month,” were often part of the offers that Tapjoy presented to gamers, the FTC writes, adding that “consumers frequently complain that they spent a significant amount—often more than $100,” in completing these offers.
It’s worth noting here that these offerwalls have been under scrutiny for roughly a decade. Back in 2011, Tapjoy faced a crackdown from Apple after the company realized some of these offers essentially bribed gamers into downloading apps that they otherwise wouldn’t in the promise of a reward—potentially inflating that app’s all-important App Store ranking in the process. Since then, the company has faced class-action lawsuits, complaints with the Better Business Bureau, and the occasional change.org petition, all alleging that the company is scamming gamers.
The new settlement will hopefully help. In it, the FTC mandates that Tapjoy “clearly and conspicuously” lay out the potential rewards for gamers faced with one of these offerwalls, and give them a timeframe for when that reward should arrive. The company will also need to work with app developers to ensure that these rewards are actually being delivered, and to “investigate consumer complaints” in cases where they’re not.
If Tapjoy doesn’t follow through, it could face fines of up to $43,280 per violation.