Earlier this year, Internet radio station Pandora was served with a grand jury subpoena related to an investigation surrounding the security of mobile apps, the company revealed in regulatory filings.
"In early 2011, we were served with a subpoena to produce documents in connection with a federal grand jury, which we believe was convened to investigate the information sharing processes of certain popular applications that run on the Apple and Android mobile platforms," Pandora said in a filing with the Securities and Exchange Commission related to its planned initial public offering.
Pandora said it was not a specific target of the investigation, but believes that similar subpoenas were issued "on an industry-wide basis" to other companies that produce smartphone apps.
In late 2010 and early 2011, however, Pandora was named as a defendant in several class-action lawsuits alleging, among other things, violations of computer fraud, computer trespass, and privacy laws, the company also revealed.
"Privacy groups and government bodies have increasingly scrutinized the ways in which companies link personal identities and data associated with particular users or devices with data collected through the internet, and we expect such scrutiny to continue to increase," Pandora said.
The company said it cannot control the actions of third parties that have access to the listener data collected by Pandora. Third-party apps are a "significant growth opportunity," but Pandora "may not be able to control" what they do with Pandora's data, the company said.
Pandora said that privacy laws and regulations and evolving, and it might be subject to new laws regarding data retention.
"In particular, government regulators have proposed 'do not track' mechanisms, and requirements that users affirmatively 'opt-in' to certain types of data collection that, if enacted into law or adopted by self-regulatory bodies or as part of industry standards, could significantly hinder our ability to collect and use data relating to listeners," Pandora said. "Restrictions on our ability to collect, access and harness listener data, or to use or disclose listener data or any profiles that we develop using such data, would in turn limit our ability to stream personalized music content to our listeners and offer targeted advertising opportunities to our advertising customers, each of which are critical to the success of our business."
In February, Rep. Jackie Speier introduced the Do Not Track Me Online Act of 2011, which would give the FTC 18 months to come up with standards for companies to follow when it comes to online tracking.