FTC Launches Investigations into Mobile Apps for Kids

by Anne Saita, m.threatpost.com
December 10th 2012 10:38 PM

The Federal Trade Commission on Monday said it's launching "non-public investigations" to determine if mobile application providers are violating federal laws by collecting information on children without their parents' permission.

A report indicates almost 60 percent (235) of the children-centric mobile apps the agency reviewed from Google and Apple app stores collected device IDs and other private data often shared with an advertising network, analytics company or other third party. More than half also displayed advertising, such as one children's app that showed an advertisement for an adult singles club. Only 20 percent disclosed their privacy policy.

That sample represents a fraction of the apps available. As of September 2012, when the survey was conducted, there were over 700,000 apps available in Apple’s App Store -- a 40 percent increase since December 2011. Google Play also has some 700,000 apps available, which represents an 80 percent hike since early 2012.

"As consumers’ embrace of the mobile marketplace has increased, so have their concerns about what mobile apps do with their personal information. For example, a recent Pew study found that 54 percent of app users decided not to install an app once they discovered how much personal information the app would collect," according to the study.

The report also said 30 percent of cell phone users deleted pre-installed apps after discovering it collected personal data they did not wish to share.

FTC officials expressed disappointment that despite the proliferation in apps for children, little had been done to improve privacy disclosures since its first survey in February 2012. This one was conducted six months later and included tests of interactive features, such as links to social media.

"While we think most companies have the best intentions when it comes to protecting kids’ privacy, we haven’t seen any progress when it comes to making sure parents have the information they need to make informed choices about apps for their kids. In fact, our study shows that kids' apps siphon an alarming amount of information from mobile devices without disclosing this fact to parents," said FTC Chairman Jon Leibowitz in a prepared statement. "All of the companies in the mobile app space, especially the gatekeepers of the app stores, need to do a better job."

Also among the study's findings, a relatively small number of third parties received information from a large number of apps, leaving the potential to build profiles of the children based on their usage.

The FTC urged the mobile app industry to provide more transparency on how data is collected and used. In return, the agency is launching consumers education for parents to build awareness for app-related data disclosures and best practices for protecting their children's privacy.

FTC staff also are launching multiple investigations to determine if some players in the mobile app industry violated the Children’s Online Privacy Protection Act or engaged in deceptive trade practices in violation of the FTC Act.

A third survey will be conducted at a future date after recommendations are in place and have had some time to gain traction.

"The survey results described in this report paint a disappointing picture of the privacy protections provided by apps for children. These findings should spur more resolute action by industry to address this important issue," according to the report.

Other government officials also are pressing app providers to be more forthright with data collections.

California's attorney general last month issued written warnings to 100 app providers they were in violation of the state's data privacy law. Kamala Harris followed up those threats last Thursday by filing a privacy lawsuit against Delta Airlines for failing to provide a privacy policy on its "Fly Delta" smartphone app as required by the California Online Privacy Act.

Original Page: http://pocket.co/sGAwI

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