U.S. Issues Red Flag on Breach of Children’s Privacy

The U.S. government has begun an investigation of potential violations by mobile app developers of children’s privacy rights.

The Federal Trade Commission said that the probe is in light of survey results that found that apps are collecting private information of smartphone or tablet owners and sharing it with advertisers and data brokers.

The FTC recently issued a staff report, titled “Mobile Apps for Kids: Disclosures Still Not Making the Grade,” that examines the privacy disclosures and practices of apps offered for children in the Google Play and Apple app stores.

According to FTC Chairman Jon Leibowitz, the agency’s recent survey disclosed, among other things, that nearly 60 percent of the apps surveyed transmit information from a user’s device back to the app developer or, more commonly, to an advertising network, analytics company, or other third party. The FTC believes that third parties are potentially building detailed behavioral profiles of children.

About 17 percent of the apps reviewed allow kids to make purchases for virtual goods within the app, with prices ranging from 99 cents to $29.99. The FTC notes that indicators for in-app purchasing capabilities are not prominently displayed, and even if noticed, could be difficult for many parents to understand.

The FTC report urges app stores, app developers, and third parties providing services within the apps to improve efforts to ensure that parents have the key information they need to make decisions about the apps they download for their children.

The FTC said it is launching non-public investigations into whether the players in the mobile app industry are violating the Children’s Online Privacy Protection Act or are engaged in unfair or deceptive practices in violation of the Federal Trade Commission Act.