May 20th, 2011

Senators Question Mobile Privacy Practices

Online Media Daily

Given the current state of the law, the Federal Trade Commission might be powerless to prevent many app developers from collecting or selling information about mobile users, consumer protection chief David Vladeck told a Senate panel on Thursday.

That’s because many apps lack privacy policies, Vladeck said at a hearing of the Consumer Protection, Product Safety and Insurance Subcommittee. The absence of such policies, he added, “makes things more difficult for us.”

Vladeck explained that the FTC typically brings charges based on either deceptive business practices or unfair conduct. When app developers violate their privacy policies—such as by sharing users’ information after promising not to do so—the FTC can target the developers for engaging in deceptive practices. But when apps have no privacy policy, the FTC can’t accuse the companies of breaking their promises to users.

Sen. John Kerry (D-Mass.) questioned whether the sharing of user information by app developers could in itself constitute an unfair practice. Vladeck said that the answer would depend on several factors, including whether consumers were injured.

Sen. Jay Rockefeller (D-W.Va.), chairman of the Senate Commerce Committee, said he believed that consumers’ expectations of privacy in their mobile devices were not being met. Addressing witnesses from Facebook, Google and Apple, he asked: “How do you work with consumers so that they can understand the information that’s being collected about them? They have that right. It comes along with the purchase price… They’re not getting that, however.”

Sen. Mark Pryor (D-Ark.), chairman of the consumer protection subcommittee, added that the mobile world “lacks basic parameters” in best practices for privacy. “Where are the opt-out options? Where are the privacy policies?” Pryor asked. “The mapping of consumers’ movement without consent is unacceptable,” he added. “An application that transfers a consumers’ location data to ad networks without informing the user is deeply troubling.”

Kerry and Rockefeller recently introduced different online privacy bills. Rockefeller’s proposal tasks the FTC with creating regulations that would establish standards for a universal do-not-track mechanism. Kerry’s bill also would require ad networks to notify consumers about online data collection and allow them to opt out of anonymous behavioral targeting, but doesn’t specifically mention a do-not-track mechanism.

Vladeck said in his testimony that although the FTC has not taken a position on whether new laws are necessary, it “supports the approach” laid out by Rockefeller.

Sen. Claire McCaskill (D-Mo.) questioned Vladeck on the FTC’s call for a do-not-track mechanism that would allow users to opt out of online tracking by ad networks. She said that behavioral advertising, or sending targeted ads to people based on the sites they visit, is what has “made the whole Internet free.” (Current estimates, however, say behavioral targeting accounts for only a fraction of online ad revenue.)

Vladeck responded that the ad industry has long said that people should be able to opt out of behavioral targeting. “They’re comfortable with a business model where consumers have choice,” he said.

Read more: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=150839

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