Data use and sharing disclosures on mobile devices need work, the FTC said in a staff report released last week.  The report recommends ways that actors in the mobile marketplace—such as mobile operating system providers, application developers, advertising networks, and analytics companies—can inform consumers of data collection and sharing practices.  While the FTC tailors recommendations for each group, the recommendations are essentially focused on providing consumers with timely and understandable data use disclosures.  If such disclosures do not materialize, FTC Chairman Jon Leibowitz said to reporters in a teleconference discussing the report, the mobile industry may face regulatory or legislative mandates.

The report is in part the result of the FTC’s May 30, 2012 workshop, which brought together members of the mobile industry, trade associations, academia, and consumer privacy groups to discuss privacy issues presented by mobile devices.  The report is also in response to increasing consumer concern about privacy on mobile devices.

While providing a wealth of benefits to consumers and players in the mobile marketplace, mobile devices have presented novel privacy issues because they are personal to the consumer and are used for numerous activities such as surfing the Internet and social networks, sending e-mails and messages, taking and sharing photographs, and simply making phone calls.  Additionally, mobile devices are almost always turned on and are almost always with the user.  All this facilitates new avenues and levels of data collection, but the space available for disclosures is limited to the size of the mobile device’s screen – often just a few inches.

While the report does not carry the force of law, it offers several suggestions for mobile privacy disclosures and provides a window into the FTC’s approach to mobile privacy.  For instance, the report indicates that the FTC views adherence to a “strong privacy code” favorably and considers geolocation information to be “sensitive”—akin to financial, health, and children’s data.

The FTC report recommends the following with respect to specific actors in the mobile marketplace:

Operating System Providers:

  • Provide disclosures and obtain consumers’ affirmative express consent before allowing apps to access data;
  • Consider a one-stop “dashboard” approach and the use of icons to allow consumers to review the types of content accessed by apps and to depict the transmission of user data;
  • Implement developer best practices that require developers to make privacy disclosures, enforce those requirements, and educate app developers;
  • Provide clear disclosures about the extent to which the platform reviews apps before making them available for download; and
  • Offer a Do Not Track function for mobile devices that allows consumers to prevent tracking by ad networks or other third parties.

App Developers:

  • Have a privacy policy that is easily accessible through the app stores;
  • Provide layered disclosures and obtain affirmative express consent before collecting and sharing sensitive information (to the extent the platforms have not already done so);
  • Coordinate with ad networks and other third parties such as analytics companies to better understand the third-party software and provide accurate disclosures to consumers;
  • Participate in self-regulatory programs, trade associations, and industry organizations to develop uniform, short-form privacy disclosures.

Advertising Networks and Other Third Parties:

  • Communicate with app developers towards providing truthful disclosures;
  • Work with platforms to ensure effective implementation of mobile Do Not Track.

Trade associations, Academics, Experts and Researchers:

  • Develop short-form disclosures for app developers;
  • Promote standardized privacy policies that will enable consumers to compare data practices across apps;
  • Educate app developers on privacy issues.

While the FTC has indicated that it will continue to monitor developments in the mobile marketplace and is open to further suggestions and proposals, it encourages actors in the mobile marketplace to implement the recommendations in the report.  In the end, the FTC hopes the report will help build trust between businesses and consumers.