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FTC Acts on Privacy as Rogue Apps Proliferate

  |  February 1, 2013   |  Comments

The FTC today said it had fined mobile social network Path $800,000 for violating the Childhood Online Privacy Protection Act (COPPA).

The FTC today said it had fined mobile social network Path $800,000 for violating the Childhood Online Privacy Protection Act (COPPA). Path automatically collected and stored personal information from users' mobile device address books, even if they had not selected the "Add Friends" option, the FTC said.

But blatant privacy violations like this are common, and the problem is getting worse, according to IP Lasso.

In a press conference, FTC Chairman Jon Leibowitz warned, "Small developers are rushing to get cool apps into the market without including privacy by design."

The FTC said that Path had collected personal information from approximately 3,000 juvenile users of the mobile app. As well, the FTC also alleged that Path's privacy policy deceived consumers by claiming that it automatically collected only certain user information such as IP address, operating system, browser type, address of referring site, and site activity information. In fact, version 2.0 of the Path app for iOS automatically collected and stored personal information from the user's mobile device address book when the user first launched version 2.0 of the app and each time the user signed back into the account.

In a statement on its blog today, Path said, "Early in Path's history, children under the age of 13 were able to sign up for accounts. A very small number of affected accounts have since been closed by Path." The statement did not include any rebuttal to the FTC's complaint that the app had accessed users' address books, even if they had not given permission.

"We see COPPA infringement all the time," Reggie Pierce, CEO of IP Lasso, told ClickZ. "I'm glad that the FTC is aware it's a growing problem. However, we got the sense on the conference call that the FTC is focused on the big guys." IP Lasso provides software that lets brands monitor app platforms for brandjacking, IP infringement, and fraud; Universal Music is a customer.

He pointed out that small developers may offer several apps that individually may have installs in only the tens of thousands. However, these developers may combine collected information from multiple little apps into one big database. "Who is looking out for those apps?" Pierce asked.

IP Lasso recently looked at more than 200 NFL-branded apps and found both licensed and unlicensed apps that required users to grant unnecessary permissions. For example, an unlicensed Baltimore Ravens wallpaper app requires permission to take pictures and video without notifying the user, as well as permission to read information about phone calls and emails, such as frequency of communication.

Pierce acknowledged that small developers may grab boilerplate permissions without the intention of taking advantage of them. The problem, he said, is that no one is monitoring whether or not they do so.

The FTC also released "Mobile App Developers: Start with Security," a guide that encourages developers to aim for "reasonable data security." It suggests designating one person to be in charge of security, and warns against relying on the mobile app platform to handle privacy.

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ABOUT THE AUTHOR

Susan Kuchinskas

Susan Kuchinskas has covered interactive advertising since its invention. The former staff writer for Adweek, Business 2.0, and M-Business covers technology, business and culture from Berkeley, CA.

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