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FTC alleges mobile app developers fail to properly disclose privacy and ad policies in apps targeting children, urges reform

News by Andrew Kameka on Monday December 10, 2012.

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Mobile app developers and app store managers need to clearly state and then follow guidelines on privacy for apps that are designed for children, according to a report released today by the Federal Trade Commission. The FTC reached that same conclusion after it studied 400 apps in Apple's App Store and Google's Android Market, since renamed Google Play, in February. Finding a system that lacked transparency for parents to know what kind of data apps collected and what kind of advertisements are displayed in apps and games targeting children, the commission urged stakeholders to establish best practices for how children are treated in the mobile app industry. After conducting a follow-up six months later, the FTC finds:

"Despite these efforts, staff found little or no improvement in the disclosures made and, worse, a significant discrepancy between the privacy disclosures and the actual practices of the surveyed apps. Without adequate and accurate information about apps they download for their kids, parents cannot make informed choices about their children?s privacy and exposure to social networks and other interactive features."

The FTC's report acknowledges that Apple and Google have made changes to their policies that may help address the needs of parents whose children have access to smartphone apps, but there's still much confusion about what data apps collect. Parents are not given clear information about privacy policies of apps aimed at children, and most apps don't provide any indication about what information is collected, or why, other than the standard permission requests required of all apps in the App Store and Google Play. The FTC also claims that some apps include in-app purchases and advertising without disclosing that information prior to download.

The lack of transparency is so great that the FTC's study has even triggered investigations into whether some apps may violate the Children's Online Privacy Protection Act (COPPA) or the FTC Act governing unfair or deceptive trade practices. COPPA requires that website operators clearly state what personal information it collects from users and obtain verifiable consent from the parent of a child under 13 who might use the website's service. The FTC is investigating if some apps would qualify as violations of COPPA because of their interactivity and lack of clarity.

A few highlights from the report include:
- 60 percent of apps transmitted device ID to the developer or an advertising or analytics firm. Of those apps, 14 transmitted geo-location and/or phone number
- Only 20 percent of apps disclose their privacy practices
- Though 58 percent of apps contain advertising, only 15 percent disclose that prior to downloading
- Though 22 percent of apps link to a social network like Facebook or Twitter, only 9 percent disclose that information prior to download
- 17 percent of apps include in-app purchases, and not all Google Play or App Store listings clearly warn users

The FTC has once again called on app developers, carriers, and app store managers (Apple and Google), to implement better systems to provide parents with clearer warnings about how their child's privacy is affected by mobile apps. The report calls for more consistent disclosures and enforcements of best practices to make sure that apps are consistent with the privacy guidelines established by app stores. These are suggestions for what stakeholders should do, not rules that Apple or Google must follow, but the FTC encourages "everyone involved in the mobile app marketplace" to follow the key principles listed in its privacy report.

The report can be read by downloading the PDF available here.

via: Ars Technica

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Andrew Kameka
Andrew is based in Miami, Florida.

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