App Annie and co-founder settle fraud charges for $10.3 million

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In its investigation, the SEC found that App Annie and Mr. Schmitt offered for free its analytics product called “Connect” to companies operating apps.

In exchange, Connect users provided their app store credentials to App Annie to gather their confidential app performance metrics. The respondents told Connect users that they will only use their apps’ performance metrics in aggregated and anonymized form to generate estimates.

The SEC also found that App Annie and Mr. Schmitt sell app performance estimates through a separate subscription product called “Intelligence.” More than 100 trading firms became subscribers of Intelligence to obtain app performance estimates, which serves as one of their bases in making investment decisions.

The company and its co-founder allegedly told Intelligence subscribers that they obtained the app performance estimates through a statistical model that used aggregated and anonymized Connect Data. They also allegedly told Intelligence subscribers that Connect users allowed them to use their confidential data that way.