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

The United States Securities and Exchange Commission (SEC) is examining AppLovin's methods of data collection after it came under scrutiny for allegedly breaching service agreements by delivering targeted advertisements to users.

According to Bloomberg, the SEC's investigation involves cyber and emerging technology experts in response to alerts from a whistleblower and several reports by short-sellers. The progress of the investigation remains uncertain, and at present, the SEC has not leveled any allegations against AppLovin.

Bloomberg reported that “Fuzzy Panda and Muddy Waters Research accused AppLovin of exploiting its role in the mobile advertising domain to illicitly collect unique identifiers from various platforms. This collection purportedly allowed AppLovin to trace users as they navigated through different websites and applications, facilitating retargeting for adverts. Such fingerprinting practices are forbidden by Apple’s App Store guidelines and were previously prohibited by Google until a change in policy this February.”

Culper Research further alleged that AppLovin took advantage of "app permissions to enable advertisements to covertly install apps directly onto users' devices without their knowledge."

AppLovin refrained from commenting but informed Bloomberg: "We regularly interact with regulators and routinely address inquiries as part of our standard operations. Any significant updates would be communicated through official public avenues." The company has also stated that the short reports contain numerous inaccuracies.

Likewise, the SEC did not provide feedback, noting that "during the [US-wide governmental] shutdown, the SEC’s public affairs office cannot address many press queries."

Meanwhile, AppLovin experienced a 14% drop in its share value overnight.