Apple and a number of iPhone app makers including Pandora and Dictionary.com were sued Monday for allegedly helping advertisers secretly create profiles of iPhone users, including their location, without their consent.
The suit, filed in federal court in Northern California, seeks both a court order to stop the profiling and monetary damages.
At issue is the practice of some app makers of passing identifying and location information about an app user to companies that show advertisements inside the apps. The apps do not ask permission to do so, nor do they make it clear to users that such information is being sent to third parties.
Other apps named in the suit include Toss It, Text4Plus, The Weather Channel, Talking Tom Cat, and Pimple Popper Lite.
The tracking is possible because Apple assigns a UDID (Unique Device Identifier) to each iPhone, iPod Touch and iPad, and apps can access that number. Advertising companies figured out this number – akin to a social security number for a phone - can be used for tracking, much like a cookie in a browser.
If an app passes along that number to an advertisers, the advertising company can use it to build up a profile of the user, as well as keep track of which ads it has shown to a user before and which of those ads a user clicked on.
With browser cookies, however, a user can easily block them or delete them, essentially cutting off the profile. Neither is possible with apps that use UDIDs, since that number can't be changed.
The suit contends that apps that send that UDID, along with location information, to third-parties violate computer and business fraud laws. Apple is likewise responsible, the suit argues, because it approves all apps for the iPhone.
"Apple knew this was an issue," said Majed Nachawati, one of the lawyers who filed the suit. "They had a duty to warn consumers and at a minimum, if they intend to profit from this, they need to let people know and get their consent."
Apple's developer rules were changed in the spring to prohibit apps from passing data to third party advertisers, a prohibition that many saw as favouring Apple's own in-app advertising program and which has not been enforced.
The practice of apps sending location data and the UDID came to light thanks to an investigation by the Wall Street Journal, published earlier this month.
Apple, unlike Google, approves every app that can be installed on a iPhone through the app store. While Apple says that's to protect users and the ecosystem, it's also the reason the company is named in the suit.
Defendant Apple, by exercising significant control over App developers and sharing profits with them, has created a "community of interest" with the other Defendants to render them joint venturers, who are responsible for each other's torts. Defendant Apple has also aided and abetted the remaining Defendants in the commission of their legal wrongs against Plaintiffs and the proposed class.
The suit also comes just weeks after the Commerce department and the Federal Trade Commission separately released reports calling for online advertising companies to clean up their acts and be more transparent with users.
A suit over companies using Adobe's Flash plug-in to track users without their consent recently settled for more than $US2 million earlier this month.