In what should be an eye opener for the new generation tech companies, who are unmindful of legal compliance, In Mobi, the mobile advertising company has been fined US $ 950,000 (approx R 6.39 crores) for collecting information about children without their consent and violating the provisions of COPPA (Children’s Online Privacy Protection Act ).
FTC (Federal Trade Commission) initially fined US$ 4 million and later reduced it to $950,000. InMobi claimed that due to a technical error that led to the process not being correctly implemented. As a result information was collected even when the privacy settings of the consumers were configured otherwise.
Naavi has many times warned the Start Ups to undertake an “ITA 2008 compliance” as part of the “Techno Legal Feasibility” before scaling up their activities. Unfortunately these companies have other priorities for their scarce resources in the initial days and later become too engrossed in business development to take care of legal compliance. The result of such ignorance and negligence is what results in liabilities such as these. It is possible that the company would not have covered themselves with appropriate insurance also and hence has to absorb the loss from their revenue itself.
Hope the company is able to absorb the loss and proceed.