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FTC Issues Mobile Privacy Guidelines

Invoking the pronouncement of agency chairman Jon Leibowitz that “the mobile world is expanding and innovating at breathtaking speed,” the Federal Trade Commission issued a 29-page report last week with recommendations for improving mobile privacy disclosures. The guidelines are aimed at mobile platforms, app developers, ad networks, analytics companies, and trade associations, but weren’t necessarily received by all of them with open arms.

“It seems as though this document may create more confusion in the space and add more noise,” Mobile Marketing Association CEO Greg Stuart noted after an initial review of the report. “The MMA has been at the forefront of privacy guidelines and directives across a number of mobile platforms, and other efforts are already underway. The Digital Advertising Alliances is introducing strong self-regulation guidance in the coming months.”

Citing a survey by TRUSTe saying that 85% of consumers want to have choices concerning targeted mobile ads, the FTC recommends the development of a universal do-not-track (DNT) mechanism that would provide mobile users a “switch” enabling them to disallow tracking by marketers at any time. Marketers fear such a mechanism could hamstring their abilities to provide services that consumers look for in mobile apps.

“If we can no longer track an ad and are not allowed to provide that click information to advertisers, there will be few of them interested in supporting the app,” says Michael Leonard, VP of mobile marketing agency SapientNitro. “There’s an implicit opt-in that is obvious to users. Take Angry Birds. You pay for it in the Apple platform, so there are no ads. On Android, it’s free and there are ads.”

 The FTC report suggests an opportunity for marketers to end-run the DNT switch, leaving it open to apps to “engage potential customers in a dialogue” to explain tracking’s benefits.  “If a consumer had the do-not-track switch on, our recommendations would allow an app developer to solicit an opt-in from a user to grant it permission to track,” says Ryan Mehm, an attorney in the FTC’s Division of Privacy and Identity protection.

But Stuart says the introduction of a DNT recommendation on the part of the FTC is premature. “The DNT story is not complete and FTC advice is premature. We’ll have to stay tuned to see what the finished [DNT] process will look like.”

The report also suggests that marketers who collect consumer data and share it with third parties provide just-in-time disclosures to mobile device users that such activity is taking place. Marketers including Leonard worry that forcing consumers to repeatedly opt in to apps will delay their access to services they’ve voluntarily downloaded.  Mehm, however, believes that the practice could be instituted without unduly inconveniencing users.

“The report recommends, for instance, that platforms should provide just-in-time exposure and obtain affirmative express consent before allowing apps to access something like geo-location,” Mehm says. “But consent would not have to be obtained every time geo-location is used. Say you download a movie app at home, then drive 50 miles away and access an app to find movie theaters nearby. You’d opt in to allow that service. But if a week later you drove 100 miles in the other direction and accessed the app to look for a theater, you’re already opted in.”

Stuart, for one, questions the FTC’s motives in releasing recommendations in an area that he feels industry leaders and organizations are already addressing. “We have been first to introduce a number of privacy efforts in order to protect the consumer and ensure that any brand engagement done via mobile is done so with boundaries,” Stuart says. “Without consumer support of mobile marketing tactics, it would be impossible to progress the industry.”

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