The plan will likely provide a brief, easy-to-read snapshot of an app's
privacy policies, similar to nutrition labels on food packages. The snapshot
would give consumers the bottom line on what information the software collects,
such as physical location, surfing habits and personal contacts, and how that
data might be used or shared with other companies.
The new labels won't replace lengthy privacy policies that consumers rarely
read anyway. And how widespread these labels become is up to industry. While
some key industry groups said they liked the idea — albeit with caveats about
testing the proposal first — it's up to individual companies and developers to
decide whether they want to comply. It could take several months for companies
to test and implement the labels.
Still, the emerging consensus was considered a major step forward for privacy
rights advocates who say consumers have been in the dark when it comes to the
widespread collection of their personal data.
"For the first time many consumers will be able to do apples-to-apples
comparisons" of different mobile apps' privacy policies, said Jules Polonetsky,
director of the Future of Privacy Forum, a Washington-based group of Internet
privacy experts.
Mobile applications like Google Maps, Angry Birds and GasBuddy have become
popular, inexpensive ways to personalize smartphones or tablets and improve
their functionality. Often free or a couple bucks to download, apps can turn a
phone into a sophisticated roaming office or gaming console.
But like all those websites that offer medical advice or parenting tips,
there's a hitch: They want information like your birthdate or ZIP code, and
often your location. Developers say data collection is necessary in many cases
for the software to work as promised. The personal data also can be sold to
marketers, making the app a lucrative reward to its creators.
This aggressive data collection has put industry at odds with consumer
advocates, including groups like the American Civil Liberties Union and
regulators at the Federal Trade Commission. Last February, the FTC released a
report advising companies to offer a "do not track" mechanism for smartphone
users and develop icons that show how a person's data is used.
Tim Sparapani with the Application Developers Alliance, a major industry
association of app developers and tech companies that supports the proposed
privacy labels, said he expects some consumers will change their behavior when
they see the new privacy labels, but that many won't.
"We know that consumers love their apps — the downloads per day demonstrates
that," Sparapani said. What the new guidelines will do is "allow for greater
transparency and comprehension among consumers of what's happening."
This month, new privacy rules by the FTC took effect for mobile apps marketed
to children under age 13. Under the updated Children's Online Privacy Protection
Act, companies can't collect information on kids in most cases unless a parent
first gives permission, such as through an electronically scanned consent form.
Parental consent is not required when a website operator collects data solely to
support its internal operations, which can include advertising, site analysis
and network communications.
If companies violate these rules, they could face costly penalties.
In a bid to head off similar regulation for mobile apps used by teens and
adults, several dozen tech industry lobbyists and privacy rights advocates
teamed up to develop the voluntary disclosure guidelines with help from the
Commerce Department's National Telecommunications and Information
Administration. The FTC has said it would look favorably on businesses in any
enforcement action that can show it complies with a strong code of conduct, such
as the one being negotiated.
John Verdi, director of privacy initiatives at NTIA, said the new labels
should make for smarter consumers.
"Compliance with the code will help app developers build and maintain trust
with consumers — trust that is crucial to the health of the mobile app
marketplace," Verdi said.
Some groups objected to the proposal, which has been in the works for more
than a year. Consumer Watchdog said the final plan would provide only "marginal
improvements" in privacy protection and called on the Obama administration to
propose legislation. Likewise, Jeff Chester with the Center for Digital
Democracy said industry "cannot be expected to challenge their fundamental — and
ever expanding — 'data maximization' business model."
But industry groups like the Software & Information Industry Association
said they support the effort.
"In a time of rapidly evolving technology, industry self-regulation is the
most effective way to maintain the right balance between consumer confidence and
continued innovation," said Ken Wasch, the group's president.
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Follow Anne Flaherty on Twitter at https://twitter.com/AnneKFlaherty
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