Pandora Subpoenaed in Probe of Privacy Policies Among Mobile-App Companies

Pandora Media Inc., the largest Internet radio company, said it’s been asked for information as part of a federal grand-jury probe into the way smartphone software developers handle personal data.

Pandora isn’t a specific target of the investigation and similar subpoenas have been issued to other publishers of apps that run on Apple Inc. (AAPL)’s iPhone and Google Inc. (GOOG)’s Android operating system, the company said in a securities filing today.

“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,” Oakland, California-based Pandora said.

As the popularity of apps grows, software developers are facing more scrutiny by regulators and privacy groups. Like many apps, Pandora’s Internet-radio service uses tracking programs to target advertising and monitor how people interact with the software. Pandora, with more than 80 million registered users, collects information such as age, gender, ZIP code and any material a person puts on their profile, including comments left on other users’ pages.

“Most people who are downloading applications have very little idea how much personal information that app can access,” said Nicole Ozer, the technology and civil liberties policy director of the American Civil Liberties Union of Northern California. The group has been pushing for more disclosure about how information is used.

App Stores

Apple and Google maintain stores for mobile software programs, letting independent developers submit their apps and take the majority of revenue when the programs sell. More than 350,000 applications are available for Cupertino, California- based Apple’s iPhone, iPad and iPod Touch, while Mountain View, California-based Google offers more than 150,000 apps.

Pandora made the disclosure in a securities filing as part of plans for an initial public offering. The company didn’t disclose the location of the grand jury. Deborah Roth, a spokeswoman, declined to comment beyond the filings.

“They represent the totality of public information about Pandora at this time,” she said in an e-mail.

Steve Dowling, an Apple spokesman, had no immediate comment. Shari Yoder Doherty, a Google spokeswoman, wasn’t immediately available for comment.

Pandora has sought to attract more listeners to its service and get them to use it for longer stretches of time. That’s helped increase revenue from advertising and subscription services, and put the company close to breaking even.

Sales more than doubled to $137.8 million in the fiscal year ended Jan. 31. The company’s net loss narrowed to $1.76 million, from $16.8 million the previous year.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Thomas Giles at tgiles5@bloomberg.net

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