FTC re-slams apps for kids over privacy concerns

In a follow up to a 2011 study, the Federal Trade Commission found that "little or no progress has been made" on disclosure of information gathering since the first report was issued.

Larry Magid
Larry Magid is a technology journalist and an Internet safety advocate. He's been writing and speaking about Internet safety since he wrote Internet safety guide "Child Safety on the Information Highway" in 1994. He is co-director of ConnectSafely.org, founder of SafeKids.com and SafeTeens.com, and a board member of the National Center for Missing & Exploited Children. Larry's technology analysis and commentary can be heard on CBS News and CBS affiliates, and read on CBSNews.com. He also writes a personal-tech column for the San Jose Mercury News. You can e-mail Larry.
Larry Magid
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FTC follow up report on app privacy for kids shows little progress being made FTC.gov

In February 2012, the Federal Trade Commission (FTC) issued a report titled Mobile Apps for Kids: Current Privacy Disclosures are Disappointing (PDF) that pointed out that there was "little or no" privacy information available to parents in the Android Google Play and Apple iOS app stores prior to download and scarce data in the apps themselves or on the app vendors websites.

And on Monday, the FTC issued a follow up report, Mobile Apps for Kids Disclosures Still Not Making the Grade that complains that "despite many high-visibility efforts to increase transparency in the mobile marketplace, little or no progress has been made."

The new report noted that since the first report, "the market for mobile apps has continued to grow at an explosive rate." There are now over 700,000 apps in the Apple app store (up 40% since December 2011) and an equal number in the Google Play store, "an 80% increase since the beginning of 2012," according to the FTC.

FTC staff downloaded nearly 1,000 apps that had the keyword "kids" and then randomly selected 200 each from the Apple App store and Google Play. The report found that "Only 20 percent of the apps staff reviewed disclosed any information about the app's privacy practices," and that nearly 60 percent of the apps surveyed are transmitting user information back to the developer or (more commonly) to an advertising network analytics company or other third party.

The report also stated that 58% of the apps (230) contained advertising within the app, "while only 15% (59) indicated the presence of advertising prior to download."

The report also found that 22% percent of the apps "contained links to social networking services, while only nine percent disclosed that fact." Budget minded parents might note that 17 percent of the apps allowed kids to make purchases for virtual goods within the app and that "although both stores provided certain indicators when an app contained in-app purchasing capabilities, these indicators were not always prominent and, even if noticed, could be difficult for many parents to understand."

Regulations coming?
In what could be a prelude to proposed regulation, the FTC is urging the mobile app industry to develop "best practices" that:

  1. Incorporate privacy protections into the design of mobile products and services ("privacy by design")
  2. Offer parents easy-to-understand choices about the data collection and sharing through kids' apps
  3. Provide greater transparency about how data is collected, used, and shared through kids' apps.

Recommendations for the industry and parents
These findings should be a wake-up call to what FTC calls the "app industry." If app developers, many of which are very small businesses, don't get their own act together on privacy, it's a pretty safe bet that the FTC and Congress will impose some pretty strict rules. Unfortunately, Congress sometimes legislates with an ax rather than a scalpel, so it would be in the app developers' interest to try to preempt such legislation or -- at the very least -- to make sure it deals with abuses and doesn't punish companies that are trying to do the right thing.

Regardless of what the government might do, parents still need to be aware of the apps their kids are using and how they affect their kids' privacy. In the absence of good information from app developers, at least read user reviews and try out the apps yourself (or with your kids) to see what information they are collecting and passing on. Pay special attention to location, access to contact information, in-app purchases, and information that children are encouraged to disclose within the app.