FTC Releases Mobile App Privacy and Advertising Guide

By J. Bradford Currier, Marc Martin, and Samuel R. Castic

Developers of mobile applications are urged to adopt truthful advertising practices and build in basic privacy principles into their products under guidance recently issued by the Federal Trade Commission. The guidance is aimed at providing mobile app start-ups and independent developers with marketing recommendations designed to ensure compliance with federal consumer protection regulations. The guidance follows recent actions by the Federal Communications Commission, the White House, states, private stakeholders, and the FTC itself to establish mobile privacy codes of conduct and safeguard consumer information. The FTC guidance focuses on two key regulatory compliance areas for mobile app developers: (1) truthful advertising and (2) consumer privacy.

(1)        Truthful Advertising – The guidance recommends that mobile app developers always “[t]ell the truth about what your app can do.” The FTC cautions mobile app developers that anything a developer tells a prospective buyer or user about their app can constitute an advertisement subject to the FTC’s prohibitions on false or misleading claims. As a result, mobile app developers are encouraged to carefully consider the promises made concerning their apps on websites, in app stores, or within the app itself. Specifically, the guidance reminds mobile app developers that any claim that an app can provide health, safety, or performance benefits must be supported by “competent and reliable” scientific evidence. The FTC notes that it has taken enforcement action against mobile app developers for suggesting that their apps could treat medical conditions and recommends app developers review the FTC’s advertising guidelines before making any claims to consumers.

The guidance also advises mobile app developers to disclose key information about their products “clearly and conspicuously.” While the guidance recognizes that FTC regulation does not dictate a specific font or type size for disclosures, mobile app developers are encouraged to develop disclosures that are “big enough and clear enough that users actually notice them and understand what they say.” The FTC warns mobile app developers that it will take action against mobile app developers that attempt to “bury” important terms and conditions in long, dense licensing agreements. 

(2)        Consumer Privacy – The guidance calls upon mobile app developers to build privacy considerations into their products from the start, also known as “privacy by design” development. The FTC suggests that mobile app developers establish default privacy settings which would limit the amount of information the app will collect. The FTC also recommends that app developers provide their users with conspicuous, easy-to-use tools to control how their personal information is collected and shared. The guidance pushes mobile app developers to get users’ express agreement to: (1) any collection or sharing of information that is not readily apparent in the app; (2) any material changes to an app’s privacy policy; or (3) any collection of users’ medical, financial, or precise geolocation information. At all times, mobile app developers should be transparent with consumers about their data collection and sharing practices, especially when the app shares information with other entities. 

The FTC also advocates that mobile app developers install strong personal information security protections in their products. In order to keep sensitive data secure, the guidance suggests that mobile app developers: (1) collect only the data they need; (2) secure the data they keep by taking reasonable precautions against well-known security risks; (3) limit access to a need-to-know basis; and (4) safely dispose of data they no longer need. Mobile app developers are also encouraged to establish similar standards with any independent contractors.

The guidance also pays special attention to the issue of mobile app protection of children’s privacy under the Children’s Online Privacy Protection Act (“COPPA”). The guidance reminds mobile app developers that they must clearly explain their information practices and get parental consent before collecting personal information from children if their apps are “directed to” kids under age 13 and keep such information confidential and secure. The FTC’s recommendations parallel its recently proposed rules designed to clarify the responsibilities under COPPA when third parties (such as advertising networks or downloadable “plug-ins”) collect personal information from users on child-directed websites. Mobile app developers are encouraged to contact the FTC or review the Bureau of Consumer Protection’s business resources when developing their privacy policies.

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