Popular internet radio service Pandora is under investigation for information gathered and shared by iPhone and Android smartphone applications, the company said Apr. 4.
Pandora was issued a subpoena as part of a grand-jury investigation. The privacy probe comes as a result of regulators cracking down on the issuing of personal data for adverstising purposes.
“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,” the company said in an interview with CNNMoney.
Despite advertising attempts and a “premium service” offered to customers, the company has not yet become profitable, losing $16.8 million in the previous fiscal year on sales of $55.2 million.
“Restrictions on our ability to collect, access and harness listener 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,” the company said in the $100 million initial public offering it filed on Feb. 11.
Students who use the free internet radio service said that they understand the need for advertising, but are not comfortable with personal information being given to advertising companies.
“I think it’s getting a bit ridiculous when the ad companies are trying to make personal ads by using personal information,” sophomore business major Mickey Russo said. “It’s not an effective place to use ads because everyone can just tune them out.”
Sophomore Rachel Shannon echoed the same concerns.
“The whole reason why people started using Pandora in the first place was to get a free radio station that didn’t stop after every song for commercials,” Shannon said. “I think that unless they find another way to bring in money they’re not going to last very long.”
Russo and Shannon both use a Pandora application on their smart phones. While unhappy with relinquishing personal information to advertising companies, both believe that advertising has become a necessary evil when dealing with the company.