ADVERTISING, MARKETING & PROMOTIONS

>> ALERT

MARCH 2012

MOBILE APP OPERATORS ANNOUNCE AGREEMENT WITH CALIFORNIA ATTORNEY GENERALIn response to consumer privacy concerns, the leading operators of mobile application platforms – Amazon.com Inc., Apple Inc., Google Inc., Hewlett-Packard Company, Microsoft Corporation, and Research in Motion Limited (the Mobile App Operators) – announced an agreement with the California Attorney General setting forth improved privacy protections for app users.

The Mobile App Operators agreed

to privacy principles that are designed

to bring the industry in line with a

California law requiring mobile apps

that collect personal information to post

a privacy policy (a notable development,

given the fact the majority of mobile

apps today do not contain a privacy

policy). The agreement will also give

consumers the opportunity to review an

app’s privacy policy before downloading

the app. Developers who fail to comply

with their stated privacy policies could

be prosecuted under California’s Unfair

Competition Law and/or False

Advertising Law.

MOBILE APP OPERATORS’ PRIVACY PRINCIPLESThe agreement between the Mobile

App Operators and the California

Attorney General includes the following

five principles:

1) Where required by applicable law,

an app that collects personal data

from a user must conspicuously

post a privacy policy or other

statement in a consistent location

describing the app’s privacy practices

which must include “clear and

complete information regarding

how personal data is collected,

used and shared.”

2) The application submission

process for new or updated apps

will include either (a) an optional

data field for a hyperlink to the

app’s privacy policy or a statement

describing the app’s privacy

practices, or (b) an optional data

field for the text of the app’s privacy

policy or a statement describing

the app’s privacy practices. For

developers who choose to submit

a hyperlink or text in the available

data field, the Mobile App

Operators will enable users to

access the hyperlink or text from

the mobile application store.

3) Users will have a means to report to

the Mobile App Operators the apps

that do not comply with applicable

terms of service and/or laws.

THE BOTTOM LINE

Given the astounding rate of growth

of mobile apps, it is not surprising

that regulators are focusing on the

privacy issues raised by such apps.

In light of current regulatory scrutiny

at both the state and federal level,

the mobile app industry must pay

special attention to developments

in this area.

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4) The Mobile App Operators will

implement a process to respond

to reported instances of non-

compliance with applicable terms

of service and/or laws, although

any action they take will not bar

regulators from pursuing a

developer for allegedly violating

applicable law, including California’s

Unfair Competition Law and/or

False Advertising Law.

ADVERTISING, MARKETING & PROMOTIONS>> ALERT

MARCH 2012

5) The Mobile App Operators and

the California Attorney General will

continue developing best practices

for mobile privacy in general and

model mobile privacy policies in

particular.

While no time table has been set for

implementation, the California Attorney

General will meet with the Mobile App

Operators in six months to assess

privacy practices in the mobile space.

FTC REPORT ON MOBILE APPS FOR KIDSThe Mobile App Operators’

announcement comes on the heels

of the Federal Trade Commission’s

(FTC) report, Mobile Apps for Kids:

Current Privacy Disclosures are

Disappointing (Mobile Apps for Kids

Report), which evaluated the lack

of privacy information available to

parents before downloading mobile

apps for their children. The Mobile

Apps for Kids Report made the

following recommendations for

protecting children’s privacy in the

mobile app space:

1) All members of the “kids app

ecosystem” – stores, developers,

and third parties providing services

– should play an active role in

providing key information to

parents who download apps.

2) App developers should provide

privacy information in simple and

short disclosures or icons that are

easy to find and understand on

a small screen of mobile devices

and should disclose whether an

app connects with social media

or allows targeted advertising.

3) Third parties that collect data also

should disclose their privacy

practices.

4) App stores should provide a more

consistent way for developers to

provide information about their data

collection practices and interactive

features (e.g., provide a designated

space for developers to disclose

this information, and provide

standardized icons to signal social

media services).

According to the FTC, additional

work is needed to identify the best

means and place for conveying data

practices in plain language and in

easily accessible ways on the small

screen of mobile devices. To this

end, on May 30, 2012, the FTC

will host a day-long public workshop

on revising its online advertising

disclosure guidelines – known as

“Dot Com Disclosures” – to provide

clear and conspicuous disclosures

in the current online and mobile

advertising environment.

FOR MORE INFORMATION

Allison Fitzpatrick Partner 212.468.4866 afitzpatrick@dglaw.com

Alison Winter Associate 212.468.4976 awinter@dglaw.com

or the D&G attorney with whom you have regular contact.

Davis & Gilbert LLPT: 212.468.48001740 Broadway, New York, NY 10019www.dglaw.com

© 2012 Davis & Gilbert LLP