AppLovin is allegedly under investigation by the SEC for violating platform partners’ service agreements, according to Bloomberg sources.
The report cites sources familiar with the matter that allege the investigation centres upon the data collection practices of the adtech giant.
The sources suggest that the US agency is looking into how AppLovin has broken platform privacy rules to push more targeted advertising to consumers. A whistleblower filed a complaint earlier this year, says the report, though Bloomberg said that SEC probes “don’t always result in enforcement actions by the regulator, but they can lead to fines for companies or corporate officials if the agency determines there were violations”.
Bloomberg added: “The regulator hasn’t accused AppLovin or its officials of wrongdoing, and it wasn’t clear how advanced the review was.”
AppLovin shares had been trading at around $667 when the Bloomberg report hit, and quickly dropped to just under $552. They recovered by market close to $587, a 12% single day drop. After hours trading saw the price drop further, to $554 at the time of writing (a ~17% drop).
It’s not the first time AppLovin has been accused of bending the rules. In February it hit back at two reports from short-seller groups Culper Research and Fuzzy Panda, which alleged that AppLovin is engaged in “the systematic exploitation of app permissions”, ad fraud, stealing data from Meta and exploiting customer data in ways that violate Apple and Google’s platform policies.
AppLovin quickly countered the claims in a blog post. CEO Adam Foroughi described the short sellers’ behaviour as “nefarious”, their claims “misleading” and added that the reports are “littered with inaccuracies and false assertions”.
In April, AppLovin published two more blogs to counter the claims and calm the markets, and announced it had appointed a law firm to look into the short sellers’ practices.
In an eventful year for the company, AppLovin also sold off all of its game studios to Tripledot in a deal worth $800m. UK firm Tripledot paid $400m in cash while giving up a 20% stake in its business to AppLovin to cover the rest.
AppLovin was also in the running to buy a spun-out US arm of TikTok earlier this year. It was later beaten to it by a US consortium led by Oracle cofounder and Trump ally Larry Ellison.
