FTC Report Raises Alarm Over Children’s Apps and Privacy Concerns

FTC Report Raises Alarm Over Children’s Apps and Privacy Concerns


Do you know where your children are in cyberspace? Application (App) developers, marketers and advertisers may know more than most parents.

What information are Apps we let our young children use on our tablets or smartphones collecting?

Youth Marketing has always presented some hot button issues for consumers, parents and the government. A recently released report from the Federal Trade Commission (FTC) may raise some alarm with parents of young children and teenagers who are now pervasive users of  “app” enabled devices.

On December 10, 2012, New York Times reporter, Natasha Singer, reported in “Apps for Children Fall Short on Disclosure to Parents, Reports Says” that several hundred of the most popular educational and gaming applications fail to inform parents about the personal data they are gathering and storing on young users. According to her review, the Federal Trade Commission (FTC) concluded that:

  • Of the 400 apps reviewed, only 20% disclose their data practices to parents.
  • Most apps failed to inform parents when, or whether, they involve interactive features that may include advertising, social network sharing or the purchase of virtual goods.
  • 58% of children’s apps included advertisements though only 15% disclosed this fact prior to download.
  • Of 24 of the apps that claimed they did not contain advertising 10 in fact did contain some type of advertising.
  • 60% of the apps transmitted information to third parties or an advertising network. This information included a devices particular identification number, raising concern that users could be followed, or tracked across platforms.

In a related feature on CNN, by Todd Sperry, “Smartphone Apps Can Compromise Kids’ Data, FTC Says“, he reported that “[b]y using the information collected through mobile devices, companies could potentially develop detailed profiles about children without a parent’s knowledge or consent” per the FTC report.

How prominent Apps have become across platforms is underscored by the following figures from T. Sperry’s story:

  • As of September, Apples App Store had over 700,000 Apps available. This reportedly reflects at 40% increase since December 2011.
  • Google Play has over 700,000 Apps available which is an 80% increase since the beginning of 2012.

The FTC report does not name apps by name to prevent the perception that by avoiding certain apps or developers parents can let their guard down. Arguably, this means the FTC recognized there is a systemic problem and not one particular set of actors bears a Lions share of the responsibility.

FTC’s report is entitled “Mobile Apps for Kids: Disclosures Still Not Making the Grade”. FTC’s findings also included a finding that 17% of the apps considered allowed children to make purchases for virtual goods within the app with prices ranging from 99 cents to $29.99. In closing, the report urges that the industry implement recent recommendations from the FTC Privacy Report including the following:

  1. Incorporating privacy protections int the design of mobile products and services;
  2. Offer parents choices about data collection that explain choices about data collection and sharing; and
  3. Increasing transparency about how data is colelcted, used and shared through kids apps.

Notably, the FTC is launching non-public investigations “to determine whether certain entities in the mobile app marketplace are violating the Children’s Online Privacy Protection Act or engaging in unfair or deceptive practices in violation of the Federal Trade Commission Act”.

As tablets become more prominent in the educational setting this raises more questions about privacy and how to police the device makers and developers of educational products while safeguarding our children, free enterprise and new technological advances. With the advent of new technology comes the need for some foresight, flexibility and regulation in the name of progress. Both time and patience will be needed to address these issues. For now, parents beware of apps whether they are “free” or paid for, because in the end nothing is really free and there appears to be a trade off in the form of personal information and location data.

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