December 10, 2012 Linnette Attai

The Federal Trade Commission has issued a new report on mobile apps for children, and to summarize, they are not pleased. In a report titled, Mobile Apps for Kids: Disclosures Still Not Making the Grade, the FTC issued findings of a survey of 400 apps, and laid out a strong call to the mobile industry to make improvements in business and disclosure practices. If you work in this space, now is the time to take notice and to create and implement best practices within your mobile product. Otherwise, your business may be subject to FTC enforcement action in the near future.

The new FTC report is a follow-up to their initial findings from earlier in 2012. In that survey, the FTC noted that “little or no information was available to parents about the privacy practices and interactive features” of mobile apps intended for children. They called on the entire mobile ecosystem – from developers to the app stores – to be more upfront with disclosures about what parents could expect to find within apps in terms of data collection, in-app advertising, social networking links, in-app commerce and more.

In the new survey, the FTC looked at all of the above information and also compared app privacy statements with actual practices. Here are some key findings:

Data Collection and Privacy:
The FTC noted that privacy policies – when they were available – were long, difficult to understand, and lacked basic details, including what information would be collected, why, and where it would be shared.
• Only 20% of apps surveyed disclosed privacy practices
• 60% of apps transmitted a device ID to a developer or ad network, analytics company or other third party
• 14 apps also transmitted the device phone number

The FTC also noted that there is a significant amount of data transmitted from multiple apps on a device to third-parties, including geolocation information. They also noted that several apps transmit information to third parties as soon as the apps are launched. This further highlights the need for privacy disclaimers that are clear, easy to understand, consistent across the industry, and available to parents prior to download.

In-app Advertising:
• 58% of apps surveyed contained in-app advertising
• Only 15% of apps disclosed that the app contained advertising
• Of 24 apps that stated that they did not contain advertising, ten apps actually did
• One app contained ads for an online dating website

Social Networking:
• 22% of apps surveyed contained social networking links
• Only 9% disclosed the presence of those links

In-App Purchase:
• 17% of apps surveyed contained in-app purchase features
• Most disclosures regarding purchase were not prominent and were difficult to understand

The FTC has called on the mobile industry to develop some best practices when it comes to app development. Specifically, they’re looking for:
• Privacy by design
• Clear choices for parents about data-collection and sharing
• Transparency about data collection, use and sharing

Next steps:
The FTC plans to release consumer education materials for parents to help them make better informed choices about the apps they download for their children. Several apps may find themselves no longer making the grade as parents get this information.

In addition, the FTC is initiating investigations to evaluate whether or not some businesses have violated the Children’s Online Privacy Protection Act or – by either not disclosing their practices or by having policies that are inconsistent with their practices – have engaged in unfair and deceptive trade practices.

The FTC also plans to conduct another survey of kid apps in the future.

Need help navigating through the FTC issues and coming up with the best practices that will protect children, assist parents and serve your business needs? Contact us at to set up an assessment of your products and get you moving down the right path.