(Reuters) -The U.S. Securities and Exchange Commission has been probing marketing platform AppLovin's data-collection practices, Bloomberg News reported on Monday, citing people familiar with the matter.
Shares of the company were down 14% at market close.
The agency has specifically reviewed allegations that AppLovin violated platform partners' service agreements to push more targeted advertising to consumers, the report said.
SEC enforcement officials assigned to cyber- and emerging technologies have been handling the matter, the report said.
The probe is in response to a whistleblower complaint filed earlier this year, along with multiple short seller reports published in the past several months, Bloomberg said.
The regulator has not accused AppLovin or its officials of wrongdoing, and it was not clear how advanced the review was, according to the report.
An AppLovin spokesperson said that it does not comment on any potential regulatory matters. The SEC said it is currently not able to respond to many inquiries from the press due to the government shutdown.
Three short sellers targeted the company earlier this year. Fuzzy Panda Research said in February that AppLovin steals data from Meta .
Culper Research had alleged AppLovin exploits "app permissions that enable advertisements themselves to force-feed silent, backdoor app installations directly onto users' phones."
Another short seller, Muddy Waters Research, said in March that code showed that AppLovin was collecting and structuring user IDs from its key platform partners, which appears to be a major violation of the platforms' terms of service. Later that month, two analysts disputed Muddy Waters' claims.
AppLovin said it has retained law firm Quinn Emanuel to investigate the short seller activity.
AppLovin, which in April submitted a bid for TikTok assets outside of China, sold its mobile games studio to London-based mobile game developer Tripledot Studios for about $800 million in a cash-and-stock deal.
(Reporting by Juby Babu in Mexico City; Editing by Sahal Muhammed and Alan Barona)
