Government investigating makers of cellphone apps

WASHINGTON — The government is investigating whether software companies that make cellphone apps violated the privacy rights of children by quietly collecting personal information from mobile devices and sharing it with advertisers and data brokers, the Federal Trade Commission said Monday. Such apps can capture a child's physical location, the phone numbers of his or her friends and more.

The FTC described the marketplace for mobile applications — dominated by online stores operated by Apple and Google — as a digital danger zone with inadequate oversight. In a report by the FTC's own experts, it said the industry has grown rapidly but has failed to ensure that the privacy of young consumers is adequately protected. The FTC did not say which or how many companies it is investigating.

Among 400 apps designed for kids examined by the FTC, most failed to inform parents about the types of data the app could gather and who could access it, the report said. Others apps contained advertising that most parents would find objectionable or included links to Facebook, Twitter and other social media services.

The report said mobile apps can siphon data to "invisible and unknown" third parties, data that could be used to develop a detailed profile of a child without a parent's knowledge or consent.

"It's not hypothetical that this information was shared," said Jessica Rich, associate director of the FTC's financial practices division.

The FTC also said it is investigating whether any of the apps developers engaged in unfair or deceptive trade practices, which would be illegal.

A trade group representing apps developers said the industry's growth has been fueled largely by small businesses, first-time developers and even high school students who do not have legal or privacy experts on staff.

Government investigating makers of cellphone apps 12/10/12 [Last modified: Monday, December 10, 2012 8:20pm]

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