Even the slickest mobile app can get caught in a privacy debacle. The blogosphere erupted in outrage in February after a blogger discovered San Francisco photo-sharing app Path was downloading users' phone contacts without permission. Soon after, another local app company, Hipster, admitted it had done the same. Both companies issued embarrassing public apologies and vowed to change their ways.
Then late last month, app developer RockYou Inc. agreed to pay $250,000 to settle allegations that it had collected personal information from children, even though its privacy policy stated otherwise.
As the RockYou settlement illustrates, app developers face more than bad publicity and public acrimony for their privacy blunders. Their legal problems, and expenses, are mounting.
They're not only being hit with a growing number of class actions. They're facing increased scrutiny from government regulators and politicians who are demanding more transparency and consumer protections from app developers.
For example, the Federal Trade Commission has been sending out "civil investigative demands" to companies in the mobile space asking about privacy policies, lawyers said. The FTC's main interest is making sure app developers are telling users exactly what they're doing, said David Jacobs, a consumer protection fellow at the Electronic Privacy Information Center in Washington, D.C.
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Source: law.com
By: Amy Miller
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