Comment by lifeisstillgood | Hacker News Reader

Comment by lifeisstillgood | Hacker News Reader

lifeisstillgood

So (getting my head round this) ... mobile app creators added an App Annie agent to their apps, which downloaded performance / usage data on their app to central servers. And App Annie promised not to sell that data to third parties unless it was "aggregated and anonymised".

(Does App Annie pay the app creators for this?)

App Annie sells this so people can work out which app to advertise on (the one with all the usage!) and which all to invest in (the one with all the usage).

But they found that no-one wanted the aggregated data, or it was nit accurate enough, so they stopped using anonymised data and used the raw data.

but said "it's ok we have permission"

Ok.

So they signed contracts on both sides, which contracts directly contradicted each other - they were always going to get caught.

But this is aggregated app usage data - Apple could publish this in a heart beat and (presumably) it would be legal and App Annie would have no market.

I know that "everything is securities fraud" and if you lie to both sides you will get caught. But this feels like a non-prosecution. The SEC had to - it was so blatent when it gets laid out, but really I doubt anyone thinks this will drain the swamp. It's all usage data.

Edit: less ! marks

It sounds to me like the contracts did not contradict.

> [App Annie] went to great lengths to assure [Trading Firms] that the financial and app-related data [App Annie] sold was the product of a sophisticated statistical model and that [App Annie] had controls to ensure compliance with the federal securities laws. These representations were materially false and misleading

It's illegal because App Annie was feeding trading firms insider information while swearing it was actually just a really good statistical model. Presumably the actual model wasn't good enough, so they started using unaggregated data to eke out perf.

What they did is not just breach of contract, but insider trading as they fed private information to trading firms.

> the order finds that from late 2014 through mid-2018, App Annie used non-aggregated and non-anonymized data to alter its model-generated estimates to make them more valuable to sell to trading firms.

Oh I see yes.

But I still read it as similar as going to a bank and saying can you supply me a list of people with over a million dollars and the bank says "we used our aggregated knowledge of our customers to create a statistical model of which of our customers has over a million. Plug your parameters in here and see what pops out"

It's a struggle to think this was ever anything but a nod and a wink.

Yeah I agree with that much

It’s the app’s financial data. Not usage data.

App developers would keenly sign up for this to get analysis and visualisation tools of the financial reports provided by Apple.

At the time App Annie came about all that Apple provided devs with was a CSV broken down into line items per country.

A bunch of companies made paid for visualisation and analysis tools/saas for this data but then app Annie had the bright idea of offering it for free and using the data to create aggregated (or not) intelligence tools.

So the app developer would download Apple data, load it up on AppAnnie and get a nice bar chart? And an assurance they would not sell the data (without anonymising it). This is who signed up when and who made a purchase etc.

Thank you

If Apple were to publish it, it wouldn't be confidential insider information. But they don't, so it is, so misusing it is a problem.

In this case, the issue would not be that the information is private, but that App Annie had a contractual fiduciary obligation to its customers which it violated.

The issue is both - if the information was non-public (which it was) then it can’t be legally traded on, and this was being sold as data to be traded on which secretly contained non-public market sensitive information.

I.e. insider trading

> both - if the information was non-public (which it was) then it can’t be legally traded on

That’s not how insider trading law works in the US. In fact, almost no country works this way, with a few exceptions like France. Insider trading laws in the US are mostly specified in terms of fiduciary obligations.

I suggest subscribing to Matt Levine’s excellent Money Stuff column. He covers this stuff constantly, including lots of court cases straddling the border of what defines insider trading.

That's the book definition of insider trading. What's your definition?

That's not the definition. Insider trading non-public information also needs to be material, and not given or received by someone in breach of duty to the company or stolen from the company.

Your definition would mean a cab driver would be insider trading if he overheard random speculation about a company that turned out to be true--that's not illegal. However, if the cab driver's passenger said, "hey, I'm an executive at at XYZ and I saw that we're acquiring FGH," that is insider trading three ways: the driver believed they were receiving confidential information, the executive breached his duty, and the executive caused stolen information to be traded. And an acquisition would of course meet the material test.

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