FTC issues new guidelines for mobile marketing

Finding the right balance between providing consumers targeted and offers while still respecting their privacy is ongoing battle for mobile marketers. Now, the The Federal Trade Commission, the nation’s chief privacy agency, has issued a staff report recommending ways that key players in the rapidly expanding mobile marketplace can better inform consumers about their data practices.

The report makes recommendations for critical players in the mobile marketplace: mobile platforms (operating system providers, such as Amazon, Apple, BlackBerry, Google, and Microsoft), application (app) developers, advertising networks and analytics companies, and app developer trade associations. Most of the recommendations involve making sure that consumers get timely, easy-to-understand disclosures about what data they collect and how the data is used.

“The mobile world is expanding and innovating at breathtaking speed, allowing consumers to do things that would have been hard to imagine only a few years ago,” said FTC chairman Jon Leibowitz. “These best practices will help to safeguard consumer privacy and build trust in the mobile marketplace, ensuring that the market can continue to thrive.”

The FTC staff report is based on the FTC’s enforcement and policy experience with mobile issues and a May 2012 FTC workshop, which brought together representatives from industry, trade associations, academia, and consumer privacy groups to explore privacy disclosures on mobile devices.

The report states that mobile technology raises unique privacy concerns. More than other types of technology, mobile devices are typically personal to an individual, almost always on, and with the user. This can facilitate unprecedented amounts of data collection. In addition, since a single mobile device can facilitate data collection and sharing among many entities, consumers may wonder where they should turn if they have questions about their privacy.

Among the FTC's recommendations, mobile platforms were advised to obtainaffirmative express consent before allowing apps to access sensitive content like geolocation,consider developing a "dashboard" approach to enable consumers to review what content is being accessed by thei apps and considering showing consumers how their data is being transmitted.

Consider providing consumers with clear disclosures about the extent to which platforms review apps prior to making them available for download in the app stores and conduct compliance checks after the apps have been placed in the app stores; and

Consider offering a Do Not Track (DNT) mechanism for smartphone users. A mobile DNT mechanism, which a majority of the Commission has endorsed, would allow consumers to choose to prevent tracking by ad networks or other third parties as they navigate among apps on their phones.

App developers should:

Have a privacy policy and make sure it is easily accessible through the app stores;

Provide just-in-time disclosures and obtain affirmative express consent before collecting and sharing sensitive information (to the extent the platforms have not already provided such disclosures and obtained such consent);

Improve coordination and communication with ad networks and other third parties that provide services for apps, such as analytics companies, so the app developers can better understand the software they are using and, in turn, provide accurate disclosures to consumers. For example, app developers often integrate third-party code to facilitate advertising or analytics within an app with little understanding of what information the third party is collecting and how it is being used.

“FTC staff strongly encourages companies in the mobile ecosystem to work expeditiously to implement the recommendations in this report. Doing so likely will result in enhancing the consumer trust that is so vital to companies operating in the mobile environment. Moving forward, as the mobile landscape evolves, the FTC will continue to closely monitor developments in this space and consider additional ways it can help businesses effectively provide privacy information to consumers,” the report states.

To read the full report, click here.