Feds investigating makers of cell-phone apps for kids

The government is investigating whether software companies that make cell phone apps have 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 Dec. 10.

Such apps can capture a child’s physical location, phone numbers of their 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 over online privacy. 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 was 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 where kids post information about themselves.

The report said mobile apps can siphon data to “invisible and unknown” third parties 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 was investigating whether any of the apps developers engaged in unfair or deceptive trade practices, which would be illegal.

A trade group representing app 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 departments or privacy experts on staff. The FTC’s report is a reminder of the importance of educating developers on best practices for privacy, the Washington, D.C.-based Association for Competitive Technology said in a statement.

In one case mentioned in the FTC report, an app that allows children to paint pictures and save them in an online photo gallery didn’t indicate that it included advertising. But investigators said the app ran an ad across the bottom of the screen for an online dating service that said, “See 1000+ Singles.”