The U.S. Securities and Exchange Commission is conducting an investigation into AppLovin regarding its data collection practices

An investigation by the U.S. Securities and Exchange Commission (SEC) is underway into AppLovin's data handling techniques amid claims of breaching service agreements with targeted advertising practices.

According to Bloomberg, the SEC recruited cyber and emerging technology experts for this investigation after a whistleblower report and "multiple" analyses by short sellers. The progress of the inquiry is not clearly disclosed, but so far, AppLovin hasn't been formally charged.

As Bloomberg noted, reports by Fuzzy Panda and Muddy Waters Research accused the company of misusing its standing in mobile advertising to acquire unique identifiers from other systems without permission, in order to follow users across various platforms for ad targeting. This activity, known as fingerprinting, is prohibited by Apple's App Store and was restricted by Google prior to changing its policy in February.

Further accusations came from Culper Research suggesting AppLovin used "app permissions allowing advertisements to surreptitiously install apps on users' devices without their consent."

Responding to Bloomberg, AppLovin stated: "We interact with regulators as a standard practice and address any questions as they arise. Any significant news would be shared via appropriate public announcements." The company previously argued that the short-seller reports contained numerous inaccuracies.

The SEC refrained from commenting, highlighting that "due to the [nationwide government] shutdown, the SEC’s public affairs office is limited in addressing press queries."

The developments impacted AppLovin's stock, resulting in a 14% decrease overnight.