The Federal Trade Commission has settled an ongoing case with mobile advertising platform Tapjoy, ordering the company to improve how it polices the advertisers who use its tech.
Tapjoy's platform allows mobile developers to integrate ads into their games that offer in-game currency and other rewards to players who complete offers, such as signing up to a subscription or making a purchase.
But the FTC found that Tapjoy had failed to prevent advertisers from getting players to engage with ads -- even spending money or giving up sensitive data -- without delivering the promised rewards or sharing the required revenue with developers.
In a statement by commissioner Rohit Chopra, the US government body said Tapjoy had "amplified false offers" with the firm's business partners "[baiting] gamers with big rewards only to cheat them when it was time to pay up."
"Tapjoy did little to clean up the mess, even when hundreds of thousands of gamers filed complaints," Chopra wrote. "This also harmed developers of mobile games, who were cheated of advertising revenues they were entitled to."
The commissioner went on to declare Tapjoy has violated the FTC Act's prohibition on unfair and deceptive practices.
As such, the FTC has proposed a settlement that "requires the platform to implement screening and testing procedures to weed out advertising that cheat games and developers."
Tapjoy has been ordered not to misrepresent rewards for consumers, the requirements to receive them or when they will be issued.
It has also been ordered to more thoroughly vet advertisers using its service, and more promptly investigate consumer complaints.
Chopra added: "This provision will help ensure Tapjoy takes more responsibility for fraud, rather than facilitating it."
In a statement to GamesBeat, Tapjoy CEO said: "We are committed to facilitating a marketplace for consumers, advertising partners, and publishers to transact with each other in a fair and clear way, while ensuring timely access to customer service."
He added: "Back in 2017, the FTC raised concerns around reward delivery. Over the past three years, we have enhanced the rewarding process and customer interaction and worked to reach a resolution that we believe benefits consumers, Tapjoy's partners, and our business overall.
"In accordance with our agreement with the FTC, we will further increase our efforts with advertisers to improve the clarity and transparency of their offers, and we will add enhancements to our offer testing and reward monitoring processes. We remain committed to improving our end-to-end consumer experience and expect the continued enhancements will benefit all of our stakeholders."