Last week the FTC announced it had settled with mobile advertising platform Tapjoy regarding allegations that it failed to provide in-game rewards that users were promised for completing advertising offers. Commissioners Rohit Chopra and Rebecca Kelly Slaughter also issued a Joint Statement on the settlement, criticizing mobile app “gatekeepers” for excessive “rent extraction” from mobile gaming apps, which they believe has forced developers to adopt alternative – and often harmful – means of generating revenue, such as loyalty offers and loot boxes. The settlement, and particularly the separate concurrence written by Democratic Commissioners Rohit Chopra and Rebecca Slaughter, highlights the increased scrutiny over the entire mobile gaming ecosystem and the various businesses that operate within it.
Tapjoy operates a mobile advertising platform, acting as a middleman between advertisers, gamers, and game developers. The platform integrates “offers” into mobile games, promising users in-game currency and other rewards for completing the offers and promising developers a percentage of Tapjoy’s advertising revenue. Advertisers pay Tapjoy for each consumer who is induced to complete an offer, which often requires users to submit personal information or spend money, for example, by purchasing a product, enrolling in a continuity program, or completing a survey. Other offer requirements may include downloading an additional app or watching a short video.