Mobile Apps and Consumer Privacy Rights

As mobile technology improves, we all do more on our mobile devices—e.g., banking, shopping, and gaming are just a few examples.  The Wall Street Journal estimates the mobile apps market as a $25 billion industry.  New businesses and entrepreneurs may want to jump into this growing market. When new developers enter the market they must consider the privacy rights of users.  The law protects consumers and their privacy from intrusion, and there are even stricter guidelines for apps used by children.  Are you interested in starting a mobile app business?  Are you ready to begin marketing your new mobile app?  If so, then there are steps you must take to ensure you are in compliance with the law and respecting the privacy rights of your customers.

What Is a Mobile Application?

A mobile application is software that can be downloaded and accessed using a mobile device, such as a smartphone or tablet. Apps can be paid or free.  Developers of free apps usually make a profit through advertisements, in-app purchases, and/or paid versions that offer more features than a free trial or “lite” version. Further, apps may collect data from the user.  Apps can access a user’s contacts, call logs, internet data, calendar, and device location.  Usually, this data is collected so that the app can perform what it is designed to do, such as make a bank transfer or direct the user to a destination through GPS.  Data collection must conform to consumer protection guidelines and developers will be held responsible to those guidelines.

What Do Developers Need To Know?

The Federal Trade Commission (“FTC”) has recently released a comprehensive video to help developers comply with the legal rights of consumers when developing and marketing mobile applications.  The FTC enforces the federal Truth In Advertising laws, which apply to advertisements.  An advertisement is any communication about a product to consumers.  This could be a description within the app or an online app store description.  The FTC requires that a developer tell the truth about his app in any of these descriptions.  Any data an app collects or utilizes must be clearly disclosed to the user.  The law requires that this information be presented clearly and conspicuously. Developers should consider these privacy concerns when they first begin development on a new app. From the beginning of the design phase, the information collected should be limited, securely stored, and any unneeded data disposed of safely.  To be safe, the app should ask for express permission for any data collected or used. Developers should be transparent about any data collected and what it will be used for. The Children’s Online Privacy Protection Act (“COPPA”) requires that app developers comply with additional security requirements when the app is directed at children under 13, or developers have actual knowledge that children under 13 will be using the app.  It requires that developers post clear privacy policies, obtain parental consent, and provide parents access to their child’s information.  This federal law also requires that information collected be stored confidentially and securely only as long as necessary for the app to function.  The market for new mobile apps is booming, and developers must take the proper steps to ensure they are in compliance with consumer privacy laws.

You may contact us to speak to attorney about your new mobile app and its compliance with consumer privacy laws.