Growing Privacy Scrutiny of Mobile Could Lead to Legislation This Year

Mon, May 23, 2011 at 4:29 pm

    Mobile firms such as Google, Facebook and Apple face growing regulatory scrutiny, with some sort of legislation looking increasingly likely.

    This was apparent from the comments made at last week’s hearing before the Senate Commerce Committee, according to privacy experts. It was the second time in two weeks that a Senate hearing focused on the mobile industry.

    “If Congress passes a law that’s too vague, nothing will change, but one that’s too onerous could suppress innovation, and the senators at the hearing recognized that,” said Jason

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    Kaslofsky, attorney at Arent Fox LLP, Washington.

    Mr. Koslofsky thinks it is likely Congress will pass some kind of privacy legislation by the end of the year.

    Officials from the Federal Trade Commission, for example, spoke at last week’s hearing, indicating that the agency was exploring how Do Not Track rules could be applied to mobile applications.

    The hearing last week was before the U.S. Senate Subcommittee on Consumer Protection, Product Safety and Insurance.

    A similar hearing was held before that by the Senate Judiciary Committee.

    Meta data matters
    The question that regulators face is how to balance the need to protect privacy against the need for data to power mobile apps and services.

    The debate seems to be headed in a direction that would create an opt-in requirement for apps and other services that use personal data, so that nothing is shared, stored, or used without permission.

    Mobile companies are likely to focus more effort on consumer education, better explaining what data they collect, how they use it, and how to opt-out, going forward.

    “The problem they face as their technology gets more complicated is that it gets more difficult to explain,” Mr. Koslofsky said.

    “Everyone understands that you share information on Facebook, but a user might not

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    understand that checking or unchecking a box somewhere on the site makes an uploaded picture appear to everyone in the world or just a few people,” he said.

    “Companies are likely to include privacy explanations in the launch of future products and features, so that it’s clear what data is being used by the company to power the experience.”

    The comments at last week’s hearing reflect the growing concern on the part of senators over mobile data collection practices.

    Stopped in tracks
    The current scrutiny of mobile companies intensified following the recent release of information showing that Google and Apple’s mobile tracking was broader than consumers and legislators had previously realized.

    A couple of class-action law suits have also recently been filed over Google’s mobile data collection practices.

    “The message for mobile companies is that they’ve got to get up-to-speed with privacy best practices and act responsibly,” said John M. Simpson, Washington-based director of nonprofit Consumer Watchdog’s privacy project.

    “If they don’t, there is going to be really strong regulation really quickly,” he said.

    While mobile firms seem to want to address the concern over their mobile data collection practices, self-regulation in any industry does not have a strong track record, per Mr. Simpson.

    At last week’s hearing, Sen. John Kerry (D-MA) asked mobile industry leaders to take part in the legislative efforts to make privacy laws encompass mobile.

    “We need to establish what we as a society believe constitutes the proper treatment of people’s information,” Mr. Kerry said in a statement before the hearing. “We cannot continue to leave it to firms to decide that on an ad hoc basis.

    “That is particularly true in an age when the mini supercomputers in our pockets are with us at all times and almost always on,” he said.

    Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

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