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

The United States Securities and Exchange Commission is looking into the data practices of AppLovin amid allegations of breach of service agreements for targeted advertising.

According to Bloomberg, the SEC's probe involves specialists in cybersecurity and emerging technologies following a whistleblower's information and several reports from short sellers. The progress of this investigation remains unidentified, and AppLovin has not been formally accused of any illegal activity by the authority.

The reports from Fuzzy Panda and Muddy Waters Research suggest that AppLovin misused its role in the mobile ad industry by illicitly obtaining unique identifiers from various platforms to track individuals' online activity and target advertisements. This practice, known as fingerprinting, contravenes Apple's App Store policies and faced a Google ban until a policy update in February.

Additionally, Culper Research has claimed that AppLovin took advantage of "app permissions that enable advertisements themselves to force-feed silent, backdoor app installations directly onto users' phones."

When approached for comment, AppLovin stated to Bloomberg, "We regularly engage with regulators and if we get inquiries we address them in the ordinary course. Material developments, if any, would be disclosed through the appropriate public channels." The company had previously dismissed the short reports as containing numerous errors.

Similarly, the SEC has refrained from commenting, citing limitations during the "US-wide governmental shutdown," which restricts responses from its public affairs office to numerous press inquiries.

Following these developments, AppLovin's stock fell by 14% overnight.