You have brains in your head. You have feet in your shoes. You can steer yourself any direction you choose. But mobile companies should pick their direction with care, considering the words of the FTC Chair! (Apologies to Dr. Seuss)
From a practical standpoint, what has happened, what should consumers expect in the future and how will these activities affect the mobile marketplace?
The most common theme has been transparency: How do consumers know what is happening to their personal information when they use a mobile device (and more specifically, mobile applications)? For example, the National Telecommunications and Information Administration (NTIA)—part of the Department of Commerce—is the ringleader in a multi-stakeholder process with players throughout the mobile ecosystem, a process that hopes to find consensus on what mobile apps should convey about how they are using consumer information. There is great debate over how apps should convey this information—icons only, text only, layered privacy notices—but the NTIA hopes to have final recommendations this spring.
About a year ago, California Attorney General Kamala Harris started this swell of mobile privacy activity. First she released a self-regulatory agreement with mobile platform providers, such as Apple and Google. Then she followed up with recommendations for mobile app developers and other mobile players.
The FTC recently entered the transparency debate too, releasing a set of best practice recommendations—Mobile Privacy Disclosures: Building Trust through Transparency—targeted at platforms, app developers and third parties (such as ad networks and analytics companies). They’ve hammered their mobile point home with a set of new consent decrees in the mobile space and just released a how-to privacy by design video for mobile app developers. The best practice recommendations also contain signs of things to come; the FTC foreshadowed that it would consider the NTIA’s yet-to-be determined standards to be a de facto safe harbor for mobile apps.
Now we just need to know what those standards are!
To complicate matters further, other sector-specific regulators may also try to get in on the regulatory or policy action as more regulated industries enter the mobile space (such as financial services, healthcare, utilities). It could become a mess—or more of a mess—with conflicting guidance and standards.
So, what should a company do, given all this chaos? Here are few themes and considerations that stand out:
- Real-time geolocation is the holy grail/hot button: Every business thinks that knowing the real-time geolocation of consumers’ mobile devices will help it sell its products—and that means using everything from identifying places where more application downloads occur, to targeting advertisements from nearby brick-and-mortar stores. Real-time geolocation, of course, has to be provided to the mobile carrier to deliver the telecommunications services. However, in every policy discussion, and even in the FTC’s revised COPPA regulations, precise geolocation—city and street—is considered sensitive information and is recommended to be used by non-carriers in the mobile ecosystem only with affirmative consent.
Consider seriously whether real-time geolocation is integral to your business model; if so, building in affirmative consent is a very good idea.
- The ubiquity and size of mobile devices may thwart the ability to effectively convey privacy settings: The screen size makes text-laden notices burdensome, while icons may be too simplistic. Similarly, this week, the FTC updated its .com Disclosures: How To Make Effective Disclosures in Digital Advertising guidance on online advertising, explicitly detailing how mobile devices make material disclosures for advertising particularly difficult, and that companies should consider the device when crafting the conspicuousness of any disclosures.
- Know what is happening in your application: A lot of policy attention has been placed on what third-party code and plug-ins are being used in applications. This is an issue for both paid apps and free apps, as some free apps will utilize third-party support services that support other apps. Some regulators have expressed concern that consumers are not receiving enough information about when and how their personal information is being used by third parties. Both the California AG and the FTC want those relationships clearly disclosed—and to possibly seek to limit cross-application use of data.
Although much of the attention thus far has been on transparency, we should expect to see the "next generation" of enforcement actions focusing on deception activity—whether the apps are actually doing what they say and living up to the disclosed promises. Accordingly, document what occurs in your applications and mobile activities.
The mobile marketplace is evolving, but one thing is certain: When enforcement agencies make “recommendations,” companies that fail to heed them may no longer “stay with the pack” and thus may be subject to investigations and enforcement actions. Some of the recommendations may affect new entrants, particularly free/inexpensive applications on mobile devices, as mobile devices become more ubiquitous and individuals’ reliance on the devices grows. There will be tension between effectively telling consumers what is happening on their devices in a digestible and understandable way and not excessively burdening the review and acceptance process.
This continues to be an embryonic area of law, but follow the evolution to make certain you do not venture into Seussian uncharted territory!
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