Apple, Google, app developers gird for FTC fines, growth-stifling government regulation

“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

23 Comments

  1. We don’t want no stinking advertising poluting and hogging our display’s precious real estate.

    Bloomberg stinks too with t’s sensationalism and substance free alarms amd sub standard yellow journalism!

          1. The kind of stunning retort I would expect from a Yankees fan.

            Be careful, don’t hurt your knuckles as they drag on the ground, and don’t let the flies in as you breathe thru your mouth.

  2. Fellow Americans, let us bow our heads and pray…pray to our Black Jesus…for more stifling anti-competitive legislation. Tie us up in more red tape…I’ll vote you in as long as my welfare checks keep rolling in…and f*** the rich bastards!

    O Black Jesus, if I’m poor, I want everyone to be poor…level the playing field for me Black Jesus and I will smell your fart and say it’s the most fragrant smell ever…

    Signed,
    The average welfare queen

    1. “Congressional lawmakers are planning legislation that would require programmers to bolster disclosure and data protection.”

      Yeah sounds real “stifling” I mean we wouldn’t want to slow the competitive market to collect as much data about you as possible without telling you, now would we? I mean really, citizens privacy expectations be damned, nothing gets in the way of the almighty dollar..

      Nice racial stereotyping BTW you bigot ass..

    2. Oh no! A level playing field! No! The majority of citizens getting a fair crack at the American dream?!? Insanity! We need to keep the top 1% rolling while the other 99% are praying they have enough gas in the car to make it to work.

      Enjoy your protective blinders BLN.

      On the actual issue here, the government is doing a great and needed thing here. Companies actually having to request permission to track you is a good thing.

      Pay us for allowing you to track us. How’s that for an idea? For example, I was suckered into getting a Walgreens card since their “deals” require it. OTOH, the checkout people ask for the card even when no savings are to be had. When this is the case, I never give it to them and politely respond “I won’t benefit by giving you my card and try to avoid having companies track me as much as possible.” Unless I get a cut in the deal, I’m not playing their game.

    3. @ Ballmer’s left nut

      I have an idea that will work for Welfare losers like me, and the rich and deserving people like you. You are going to love this.

      How about all people who are Democrat will get full disclosure of their privacy rights and will receive full disclosure, and people like you who find the Obama administration too anti-competitive will never receive any disclosure and they can use your data any way they see fit.

      I like it, when you register Republican, all of your data can be used for any purpose, and when you register Democrat, you are guaranteed full disclosure.

      Would this make you happy? Now us lame Democrats can get what we want without impeding on your right to have your data secretly sold all over the internet.

      Now this is what I call reaching across the isle for a compromise!

      Now that I gave you a good idea that you can use, can you please send me a check, please? Because of people like you my Welfare checks aren’t enough to buy that new Mac with Retina display

  3. I would gladly fill out a survey telling advertisers what I am interested in – but I do not appreciate the tracking, stalking, espionage, etc. of companies like Google, Facebook, etc…..

    BACK OFF!!!

  4. I’m sure the Mafia can argue that government laws against extortion are stifling the growth of their business. Not all regulation is bad, if it keeps the playing field level for everyone.

    1. The methamphetamine industry are innovators to the extreme!

      What used to take a chemist and a lab can now be done by average trailer trash in a coke bottle at the back of Walmart using cheap and readily available items.

      YouTube “shake and bake meth” sometime for an education on the big breakthroughs meth heads have invented.

  5. Welcome to the Borg.
    “We at Google serve you, the victim…cough!…consumer, with what we want…ahem!…what ‘you’ want, when we decide. Google Glass will crowd source everything everywhere. We will video you, record your conversations, plot your movements and direct you to where we know you want to be. We will inhibit…ahem…protect you from competing technology company’s less intrusive…ahem !…useful solutions…and…you will not have to do a thing. We will do it all for you in our…cough, best interests. We have a record second to none”.
    Creepy.

  6. As and advocate of Marketing Maven practices, I am so far unimpressed with this government over-regulation FUD. Boohoo, citizens have natural and constitutional PRIVACY RIGHTS. So deal with it and STFU, abusive marketing morons.

    Also hilarious: That our US government is still hypocritically willing to foist ACTA on the world, as well as CISPA and the SOPA/PIPA horrors here at home, all of which bend to the will of our brain dead Corporate Oligarchy (specifically the RIAA, MPAA and Chamber of Commerce) in pursuit of citizen privacy and speech demolition.

    Damn! What a sick era.

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