Mobile Advertising Company Gets Flack from FTC for Failure to Deliver Upon Advertised Promises

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Tapjoy, Inc. (“Tapjoy”), a mobile advertising company, settled FTC allegations that it failed to provide promised in-game rewards to consumers. Tapjoy operates an advertising platform that works within mobile games and offers in-game virtual currency to users who complete the activities of third-party advertisers (i.e. purchase products, sign up for a free trial, take a survey). Despite hundreds of consumer complaints, Tapjoy failed to deliver on its promises to consumers who earned in-game rewards.

The settlement terms prohibit Tapjoy from misleading users about the rewards they can earn and Tapjoy remains responsible for the actions and inactions of its third-party advertiser partners. Namely, the FTC held that if the third party advertisers fail to deliver on their promises, Tapjoy would be responsible for fulfilling promises made to consumers.

Though it seems intuitive, advertisers should be careful to keep their advertised promises, even if delivery on those promises hinges on third party actions. Advertisers should rely on their commercial contracts with third-party advertising partners, for the third party advertising partners’ failure to deliver on their promises. However, the consumer should not be affected by the inactions of the third party advertising partner and should have a seamless consumer experience.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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