United States: On The Eighth Day Of Privacy, My Mobile Apps Know Everything About Me . . .

Last Updated: December 21 2013
Article by Jake Romero

Of all the "Days of Privacy" looking forward to 2014, we believe that the issues surrounding mobile applications and privacy will see some of the most intense regulatory focus .... read on, and be prepared....

One could argue that the guiding principle behind the exponential growth and pervasive influence of the mobile application industry has been that it is limited only by our imagination's ability to identify tiny new problems to solve, like how to pick the ripest watermelon and how to be a less terrible person while using Google+ video chat.  And yet, 2014 could be a year in which regulatory efforts and critical market forces are as notable as the technological innovations, as increased enforcement efforts, greater consumer awareness and certain compliance difficulties unique to mobile applications create a "perfect storm" of potential liability.

In the past few months, state and federal regulatory agencies have continued to publish policy rationales for directing resources toward mobile application privacy. In February, the Federal Trade Commission released a Staff Report focused entirely on mobile technology in which the FTC made it clear that all parties involved in the mobile industry share responsibility for ensuring that appropriate consumer protections are in place.  California released a similar report after laying groundwork for more than a year to ensure that California's data privacy regulations, which are among the toughest in the nation, would be applicable to mobile applications.  In each case the reports hinted strongly at increased enforcement efforts and in the past few weeks we have been given a clearer view of what such increased enforcement efforts will look like. 

The office of New Jersey Acting Attorney General John J. Hoffman announced a settlement agreement with California-based mobile application developer Dogokeo, Inc. in connection with its "Dokobots" application.  The Dokobots app was a scavenger hunt game that utilized geolocation data to direct users toward animated cartoon Dokobots and other digital items.  The state alleged that Dokogeo's collection of information through its mobile application violated the federal Children's Online Privacy Protection Rule (COPPA) and the Federal Trade Commission's COPPA Rule because the Dokobots application was directed to children and failed to obtain verifiable parental consent prior to the collection of personal information from children.  Dokogeo allegedly also failed to link to its privacy policy on its homepage so that parents and other users would be able to find information regarding Dokogeo's data collection practices.  Under the terms of the settlement agreement, Dokogeo is required to (i) clearly and conspicuously disclose, in its mobile applications and on the homepage of its website, information regarding its collection, disclosure and use of information, (ii) verify that all persons using any of its mobile applications that collect personal information are over the age of 13, (iii) remove certain information regarding children from its website and (iv) otherwise comply with the requirements of COPPA and the COPPA Rule as they pertain to online services directed to children.  The settlement also includes a suspended settlement payment of $25,000, which Dokogeo will be required to pay if it fails to comply with the terms of the settlement, or otherwise violates COPPA or New Jersey's Consumer Fraud Act at any point during the 10 year period following the date of the settlement.

Less than a month later, the FTC announced a proposed consent agreement with Goldenshores Technologies, LLC.  Goldenshores Technologies marketed the "Brightest Flashlight Free" mobile application, a free mobile application that, according to the proposed consent agreement, has been downloaded tens of millions of times.  The FTC alleged that Goldenshores Technologies engaged in unfair and deceptive practices by failing to disclose that certain data, including geolocation data and persistent device identifiers, would be collected by the application and shared with third parties.  The FTC also alleged that the collection of data by the application commenced prior to the user's acceptance of the app's end user license agreement.  Under the terms of the proposed consent agreement, Goldenshores Technologies is required to, among other things, (i) update its disclosures with respect to the collection, use and disclosure of information, (ii) specifically disclose how geolocation information is used, why it is collected and with whom it is shared, (iii) delete personal information of users collected prior to the date of the consent agreement and (iv) maintain, for a period of 5 years following the date of the consent agreement, certain advertising and promotional materials containing representations about data collection, user complaints and inquiries, and documentation showing compliance with the consent agreement.

The varying allegations in the Dokogeo and Goldenshores Technologies agreements highlight the difficulties mobile applications face in complying with state and federal regulations.  On one hand, the extremely personalized nature of data collected by mobile phones mandates heightened protections and disclosure.  On the other hand, the complex and multi-layered support structure for most mobile applications (not to mention the smaller screen size) can make it difficult to fully describe the extent to which data is shared with third parties, and create unforeseen security risks.  One recent report, for example, found that the majority of mobile applications are vulnerable to hackers because of serious security flaws related to a combination of over-collection of personal data and incorrect implementation of encryption measures, while another report found vulnerabilities in apps that access data using public Wi-Fi networks.  In addition, the application of certain sector-specific laws, such as Dokogeo's alleged violation of COPPA, are a particular risk for mobile applications because the use of animated characters and kid-friendly themes (both of which were a factor in the Dokogeo settlement agreement) are commonly used by mobile applications to entice adults.

At the same time, we have seen an increase in media coverage of mobile data privacy issues.  The information leaked by Edward Snowden has kept stories related to collection of personal information squarely on the front pages and over Black Friday there were numerous stories describing the use of mobile device tracking by retailers.  On the editorial pages concerns persist that consumers do not realize how much private information is being collected by smart phones.  As a result, a substantial increase in the number of class action claims against mobile applications in 2014 is not merely possible, but likely. 

With that in mind, on this 8th day of privacy, here are 8 steps you can take to help reduce liability in connection with your mobile application or online service in 2014:

  1. Reassess your security measures. 2014 will also bring new data breach notification requirements.  If your business is newly subject to any such requirements, understanding your risk profile will require a fresh look at how secure your system is.
  2. Understand how your customers' information is used and shared. Providing full and accurate disclosure to users requires understanding who you share information with and how those third parties use and share the information.  This includes sharing with service providers in ways that may otherwise be considered "routine" in your industry. Also, be sure that you understand how those third parties protect the information you share.
  3. Not just "how" and "what", but "why".  The requirements under the Goldenshores Technologies consent agreement show that it isn't enough to simply disclose that information may be collected.  Effective notice requires that users be informed why information is being collected.
  4. Consider deleting what you don't need.  The easiest way to reduce your risk profile is to limit what you collect and retain. Consider putting processes in place to collect only what your service requires and to delete information that you no longer need, such as information related to closed accounts.
  5. Consider context, not just consent.  As we discussed after New York Comic Con was criticized for hijacking attendee Twitter accounts, the expectations of users regarding data collection should be considered as a separate issue from obtaining user consent.  In considering whether to bring an enforcement action, it is likely that the FTC considered how many of Goldenshores Technologies' flashlight users would be surprised to learn how much geolocation data the "free" flashlight required.
  6. Consider your audience.  Whether a service is "targeted to children" may seem like a simple concept generally, but it can be difficult to apply to specific examples, particularly in the realm of games and entertainment.  As we describe in our guide to compliance with the amended COPPA Rule, there are a number of factors that should be considered when determining whether a Web site or online service or portion thereof is directed to children.
  7. Have a plan for when the worst occurs.  Data breaches are considered "one of the unfortunate realities of doing business today".  The moment when you discover there has been a data breach is not the time to figure out your plan for what to do when you have a data breach. There's no time like the present to put a game plan in place that can be used in the event of an emergency.
  8. Subscribe to our blog. Throughout the year we'll continue to cover ongoing issues related to data privacy and security. Let your Mintz Levin privacy & security team help you keep up with the most recent developments.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Jake Romero
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.