Facts

Tapjoy, Inc. is a California-based mobile device advertising platform that earns fees from placing third-party advertisements in mobile games. Offers and advertisements appeared on an "offerwall" from which mobile game users can select and earn game rewards for completing instructions associated with the third-party offers and advertisements. The Federal Trade Commission initiated an investigation against Tapjoy, Inc. concerning and regarding its business practices as they related to the offerwall.

COMMISSION'S CONTENTIONS: The Commission contended that defendant mislead consumers to believe that they stood to win in-game rewards for following advertisement instructions on the offer wall. In fact, consumers did not gain rewards as promised or the receipt of rewards were delayed. It was deceptive to not inform consumer's on the nature of defendant's affiliation with the third-party advertisers. Moreover, hundreds of thousands of consumers complained about receiving no reward after revealing their personal information including medical and contact information. Defendant was therefore aware of the plight it caused consumers but took no steps to remedy the situation and was therefore liable for the resulting damage to consumers.

DEFENDANT'S CONTENTIONS: Defendant denied the contentions but agreed to a settlement in which it neither admitted nor denied the allegations in the FTC's proposed complaint.

Result

The settlement prohibits defendant from misrepresenting consumer rewards and the terms of those rewards. Defendant was also required to monitor certain offer content on its firewall, investigate consumer complaints alleging they did not receive rewards, and discipline advertisers who deceived consumers. The settlement did not include any penalties or monetary payment.

Other Information

COMMISSIONERS: Joseph J. Simons, Chairman, Rohit Chopra, Noah Joshua Phillips, Rebecca Kelly Slaughter, Christine S. Wilson.