Following the explosive growth of mobile services, the Federal Trade Commission (FTC) has released a report to help build trust in the mobile marketplace.
The US privacy agency, which promotes consumer protection, is recommending that critical players in the mobile industry, such as app developers, advertising networks and analytics companies, better inform consumers about their data practices.
With an estimated 217 million smartphones flying off the shelves in the fourth quarter of 2012, the report highlights the need for a code of conduct on mobile application transparency. FTC chairman Jon Leibowitz said the outlined best practices in the report will help to safeguard consumer privacy and build trust in the mobile marketplace, ensuring the market can continue to thrive.
“The mobile world is expanding and innovating at breathtaking speed, allowing consumers to do things that would have been hard to imagine only a few years ago,” Leibowitz said.
Ad Network Tracking
As mobile devices can facilitate unprecedented amounts of data collection, the report stresses that mobile platforms should consider offering a Do Not Track (DNT) mechanism for smartphone users, allowing consumers to prevent tracking by ad networks or other third parties as they navigate among apps on their phones.
The report says that advertising networks and other third parties should also work closely with mobile platforms to ensure effective implementation of DNT, and should communicate with app developers so they can provide truthful disclosures to consumers.
If DNT was implemented as standard, this could cause major repercussions for performance marketers who rely on cookies for tracking conversions.
Further suggestions from the FTC include the development of a ‘one-stop dashboard’ approach to allow consumers to review the types of content accessed by the apps they have downloaded, providing just-in-time disclosures, and obtaining affirmative express consent for other content that consumers would find sensitive in many contexts.
The FTC staff report is based on its enforcement and policy experience with mobile issues, and a workshop, which brought together representatives from industry, trade associations, academia, and consumer privacy groups to explore privacy disclosures on mobile devices.
According to the FTC, less than one-third of Americans feel they are in control of their personal information on their mobile devices, and 57 per cent of all app users have either uninstalled an app over concerns about having to share their personal information, or declined to install an app in the first place for similar reasons.
The report concluded: “FTC staff strongly encourages companies in the mobile ecosystem to work expeditiously to implement the recommendations in this report. Doing so likely will result in enhancing the consumer trust that is so vital to companies operating in the mobile environment.”
In addition to the FTC’s new business guide, aimed at encouraging developers to improve data security, the US Department of Commerce’s National Telecommunications and Information Agency is working with other stakeholders to develop a code of conduct on mobile app transparency.