On December 10, 2012, the Federal Trade Commission (FTC) released its “Second Kids’ App Report” about privacy protections in apps designed for children.  The FTC’s findings were not pretty.   http://www.ftc.gov/opa/2012/12/kidsapp.shtm  

The report found that many of the apps sold and marketed to children transmitted data about phone numbers, precise location and the unique serial code of the mobile device to advertisers and other third parties.  All of this was without the users’ knowledge or consent.  The FTC reviewed 400 of the most popular children’s apps appearing on Google and Apple platforms.  Of those, only one-fifth disclosed data collection practices. 

As a result of this, the FTC announced its intention to examine the practices of some of the app developers to see whether they violated the Children’s Online Privacy Protection Act of 1998 (COPPA), 15 USC Section 6501-6506   http://www.coppa.org/.  COPPA requires website operators to obtain the permission of parents of children younger than 13 before collecting or sharing certain information about the child users.

National laws and regulations like COPPA and state laws all have their own standards for the collection of personal data.  Additionally, there are the possible effects of future laws and regulations.  This is a difficult landscape for the small firm app developer to navigate because of the large number of moving parts.

If you are an app developer, regardless of whether your programs are geared to children, you need to understand these issues and take pro-active steps as these developments along with current and future regulations will affect your livelihood.

One big player among the states is California.  Its Online Privacy Protection Act (CALOPPA) Cal. Bus & Prof. Code Sections 22575-22579, requires all mobile apps that collect personal data to have a privacy policy.  California is fully prepared to play hardball with developers.  Recently, it sued Delta Airline for failing to comply with CALOPPA.  http://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-files-suit-against-delta-airlines-failure

The current environment of consumer concern and industry pressure to move forward has a parallel in the recent past when we all endured a glut of SPAM in our e-mail in-boxes.  Various states enacted legislation to regulate the out of control spam, resulting in a patchwork of state laws and regulations.  In 2003, the federal government enacted the CAN-SPAM Act, 15 USC 7701 et seq.  http://en.wikipedia.org/wiki/CAN-SPAM_Act_of_2003.  Although the Act was not as strict as some wanted, the CAN-SPAM Act did provide order to the cacophony of regulatory schemes as the federal law preempted the state laws.  Needless to say, we are far from getting even that level of consistency.

There is an obvious need for one, nation-wide standard to protect children’s online privacy given the reach of the internet and the broad range of competing interests. But as of now, we are far from a uniform national standard.  And who knows whether Congress will develop a workable fix before the next big online communication method replaces mobile apps? 

However, there is hope. Some groups are trying to be proactive.  For example, the Application Developers Alliance (ADA), http://appdevelopersalliance.org/, and the American Civil Liberties Union (ACLU) have introduced draft app transparency screens.  These prototypes would give consumers a chance to compare the data collection practices of a mobile app, to show the kinds of data collected and the groups with whom it is shared before opening the program.  See http://www.nytimes.com/2012/12/09/technology/effort-to-clarify-mobile-app-data-rights-hits-snags.html    It is not certain that such would meet CALOPPA’s requirement, but it certainly would be a start.

App developers, especially smaller ones, should consider these proactive “fixes” and join a group like the ADA to be kept up-to-date about the many twists and turns in this ongoing story.