FTC Announces Settlement with Social Networking App and Issues Staff Report Regarding Mobile Device Privacy Disclosures
March 5, 2013White & Case Technology Newsflash
Daren M. Orzechowski
, Allison M. Dodd
On February 1, 2013, the Federal Trade Commission ("FTC") announced an agreement with social network mobile application ("app") operator Path, Inc. ("Path") to settle the FTC's claims that Path collected personal information from Path users' mobile device address books without their knowledge and consent, in violation of the FTC Act,1 and violated the Children's Online Privacy Protection Act and Rule ("COPPA")2 by collecting children's information without providing the requisite notice and obtaining parental consent (the "Settlement").3 On the same day, the FTC issued a Staff Report on best practices for mobile privacy disclosures by key mobile industry actors (the "Staff Report").4 The Settlement and the Staff Report are important because they reflect that the FTC continues to focus on mobile privacy concerns and that separate and prominent just-in-time disclosures and express consent prior to the collection of personal information from mobile devices may be required for information that consumers consider to be sensitive information or unexpected in the context of collection by a particular app.
The Path Settlement
FTC Mobile Privacy Disclosure Guidance
The Staff Report contains best practices recommendations specifically directed to "key commercial players" in the mobile marketplace, namely, mobile platforms and providers (mobile operating systems and providers, as well as the app stores they offer), app developers, advertising networks and analytics companies, and app developer trade associations.11 The Staff Report recommendations vary for each type of entity12 but generally reflect the FTC's position that key mobile industry players need to: (a) provide clear, just-in-time disclosures and obtain express affirmative consent before apps collect or use personal information of mobile device users, including information that is by its nature sensitive and information that may be sensitive to consumers in certain contexts, such as photos, calendar entries and contacts; (b) work together to accurately notify consumers concerning information collection and sharing practices; (c) consider offering a do-not-track mechanism to allow consumers to opt out of third party tracking across apps; and (d) develop standardized privacy policies and simple "dashboard" approaches to allow mobile device users to review and change their information collection preferences for all apps and categories of information. These recommendations echo the disclosure and consent requirements imposed on Path and emphasize the importance of transparency and meaningful choice in the FTC's current initiatives.
Although the Path Settlement does not bind app developers or entities other than those specifically covered by the settlement, and the Staff Report is not binding law, these FTC actions are important because they may be setting the tone for future FTC enforcement. It is likely that in resolving enforcement actions, the FTC will now seek to impose the requirements discussed above in the mobile space. App developers, platform providers and other mobile device players should closely monitor the FTC's enforcement actions and published guidance concerning mobile disclosures and take the FTC's recommendations and agreements into consideration in developing and rolling out apps and working with other mobile device industry participants.
1 - See 15 U.S.C. §§ 45(a)(1) (prohibiting unfair or deceptive acts or practices in or affecting commerce).
2 - See 15 U.S.C. §§ 6501-6506; 16 C.F.R. pt. 312 et seq. (1999).
3 - United States v. Path, Inc., No. C13-0448 (N.D. Cal. Jan. 31, 2013) (consent decree and order for civil penalties, permanent injunction and other relief), available at http://www.ftc.gov/os/caselist/1223158/130201pathincdo.pdf; Press Release, FTC, Path Social Networking App Settles FTC Charges it Deceived Consumers and Improperly Collected Personal Information from Users' Mobile Address Books (Feb. 1, 2013), available at http://ftc.gov/opa/2013/02/path.shtm.
4 - FTC, FTC Staff Report, Mobile Privacy Disclosures, Building Trust Through Transparency (Feb. 2013), available at http://www.ftc.gov/os/2013/02/130201mobileprivacyreport.pdf; Press Release, FTC, FTC Staff Report Recommends Ways to Improve Mobile Privacy Disclosures (Feb. 1, 2013), available at http://www.ftc.gov/opa/2013/02/mobileprivacy.shtm.
5 - United States v. Path, Inc., No. C13-0448, 3-4 (N.D. Cal. Jan. 31, 2013) (complaint), available at http://www.ftc.gov/os/caselist/1223158/130201pathinccmpt.pdf (hereinafter "Complaint").
6 - Complaint, at 7.
7 - Id. at 8.
8 - Settlement, at 9-11.
9 - Settlement, at 12.
10 - Settlement, at 12-18.
11 - Staff Report, at 1.
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