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Online music provider Pandora Media disclosed in a filing to the Securities and Exchange Commission Monday that it has received a subpoena related to a federal grand-jury investigation about sharing customer information in its smartphone app.
The company, which filed for an initial public offering with the SEC earlier this year, added the latest tidbit of information regarding the grand jury subpoena to its S-1 on Monday. The disclosure was listed under potential Risk Factors for investors interested in participating in the IPO.
Pandora said in the filing that it believes it is one of several Internet publishing companies with mobile apps to receive the federal grand jury subpoena. The company didn't disclose the location of the grand jury or any other specific information related to the grand jury investigation.
These applications have recently come under fire as officials question whether these apps violate consumers' privacy.
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The company, which filed for an initial public offering with the SEC earlier this year, added the latest tidbit of information regarding the grand jury subpoena to its S-1 on Monday. The disclosure was listed under potential Risk Factors for investors interested in participating in the IPO.
Pandora said in the filing that it believes it is one of several Internet publishing companies with mobile apps to receive the federal grand jury subpoena. The company didn't disclose the location of the grand jury or any other specific information related to the grand jury investigation.
"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. While we were informed that we are not a specific target of the investigation, and we believe that similar subpoenas were issued on an industry-wide basis to the publishers of numerous other smartphone applications, we will likely incur legal costs related to compliance with the subpoena, management's attention could be diverted and there is no guarantee that we will avoid costly litigation. Any claims or allegations that we have violated laws and regulations relating to privacy and data security could result in negative publicity and a loss of confidence in us by our listeners and our advertisers, and may subject us to fines by credit card companies and loss of our ability to accept credit and debit card payments."
Several smartphone applications, including Pandora, monitor consumers' behavior to get more information that helps advertisers target individuals. For example, Pandora collects information such as gender, ZIP code, music preferences and other information contributed to a user's profile to provide more targeted advertising.These applications have recently come under fire as officials question whether these apps violate consumers' privacy.
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