AppLovin (NASDAQ:APP) shares continued to slide on Tuesday, falling 3.2% in premarket trading following a steep 14% drop on Monday, after reports emerged that the U.S. Securities and Exchange Commission (SEC) has opened an investigation into the company’s data-collection practices.
According to Bloomberg, which cited sources familiar with the matter, the SEC is examining whether AppLovin may have violated service agreements with its platform partners in an effort to deliver more targeted digital advertising. The inquiry is reportedly being conducted by enforcement officials within the SEC’s cyber and emerging technologies unit.
The probe focuses on whether the mobile advertising technology company collected or used consumer data in ways that breached its contractual obligations with major partners — a move that could raise compliance and privacy concerns amid intensifying regulatory scrutiny of the digital advertising industry.
AppLovin, known for its software that helps mobile app developers analyze user behavior and optimize ad performance, has become a major force in app monetization. However, the SEC investigation adds a new layer of uncertainty to a sector already facing heightened oversight in both the U.S. and Europe regarding data protection and privacy standards.
The company’s stock had surged earlier this year, gaining about 80% year-to-date and more than 325% over the past 12 months, before the recent selloff erased a portion of those gains.
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