“As the government clamps down on alleged privacy violations by mobile applications, Google Inc., Apple Inc. and legions of software developers are girding for fines and rules that analysts say threaten to stifle growth,” Olga Kharif reports for Bloomberg News. “The U.S. Federal Trade Commission, which this month fined Path Inc., a social-networking site, $800,000 for unauthorized collection of user data, is investigating a rising number of mobile apps for privacy violations. California Attorney General Kamala Harris is stepping up scrutiny of app makers, and congressional lawmakers are planning legislation that would require programmers to bolster disclosure and data protection.”

Kharif reports, “Developers rely on tools that track users’ whereabouts, surfing habits and buying preferences to pack their apps with ads and features. Yet, with vast amounts of personal data bought and sold over the Web, user privacy is at risk. Therein lies a conundrum: More fines and tighter rules to protect consumers could boost costs for small companies whose apps are fueling demand for mobile advertising, tablets and smartphones. ‘Privacy measures could directly impact the development of the mobile-advertising market,’ said John Jackson, an analyst at Framingham, Massachusetts-based researcher IDC. ‘Any legislative actions could lead to very heavy setbacks.'”

“That has big implications for Google and Apple, which together account for 91 percent of smartphone operating systems,” Kharif reports. “These companies are taking steps to safeguard user data and lessen the likelihood of a raft of new rules. Apple’s efforts include ‘limited ad tracking and the ability for customers to manage their privacy settings for location, contacts, photos and more,’ said Tom Neumayr, a spokesman for Cupertino, California-based Apple… Google updated its developer program policy in August to prohibit apps that disclose personal information without user consent.”

“More strictures are coming. The FTC’s revised Children’s Online Privacy Protection Rule, taking effect in July, will require app makers to get parental consent to collect information from children. That will result in about $10,000 in legal costs per developer, costing $270 million for makers of education apps for Apple devices alone, said Morgan Reed, executive director of the the Association for Competitive Technology, whose members include Apple,” Kharif reports. “Congressional lawmakers are working on legislation this year that would tighten mobile privacy protection and improve disclosure. The Apps Act will be referred to a House Energy and Commerce Committee subcommittee, according to Andy Phelan, communications director for Representative Hank Johnson, a Democrat from Georgia.”

Read more in the full article here.

MacDailyNews Take: Beware unintended consequences.

As we wrote last October:

Over the last few months, sans ad tracking, complaints about ads have definitely increased. We believe that poorly targeted ads – ads for snowblowers served to people living in Phoenix – are more irksome than ads focused more on the things in which people are actually interested.

Online advertising definitely isn’t all the way there yet, but it is preferable to other more broadside forms of advertising (TV, radio, etc) where the programming demographics is the only targeting tool available to the advertisers (you’re watching “Chasing Classic Cars,” so here’s your Sears Craftsman tool ad). At least with online ads, we get ads for, say, running shoes, after we’ve searched for and browsed – ta da! – running shoes. Now, if only there was a way to tell the advertisers, “Hey, we already bought our shoes; not in the market anymore, so you can stop the shoe ads now!”

Hopefully, we’ll get there someday soon. More efficient advertising is less bothersome and simply works better for everyone, which, to us at least, means fewer ads!*

(*Earlier this year [2012], we removed 8-10 banner ads along the right column of our site to improve user experience and page loading speeds. We continue exploring ways to limit and reduce the number of ads on our pages.)

Related articles:
Apple App Store rejecting iOS apps using cookie-tracking methods – February 25, 2013
Apple’s iOS 6 delivers new tracking technology for advertisers; users have option to disable – October 11, 2012
Apps not using UDID data getting 24% lower ad prices – April 25, 2012
Amid privacy concerns, Apple has started rejecting apps that access UDIDs – March 25, 2012
Apple makes big change to iOS 5: Phasing out developer access to UDID – August 20, 2011