FTC scolds Apple, Google and developers over (lack of) kids' privacy

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By Wilson Rothman
The Federal Trade Commission released its second report on mobile apps for kids, findingFederal Trade Commission

Parents still aren't given the guidance they need to determine whether or not kids' apps are safe, the Federal Trade Commission said Monday. 

Comparing a new survey of kids' apps with its 2011 study, the FTC observed "little progress toward giving parents the information they need to determine what data is being collected from their children, how it is being shared, or who will have access to it." To make matters worse, in-app connections to social media and mobile ad networks make tracking even more difficult, and even hard to identify by the developer itself.

"While we think most companies have the best intentions when it comes protecting kids' privacy, we haven't seen any progress," said FTC Chairman Jon Leibowitz, in a statement. "In fact, our study shows that kids' apps siphon an alarming amount of information from mobile devices without disclosing this fact to parents."

Also read: iParenting: How I keep my kids safe around tablets

Under the FTC's Children's Online Privacy Protection Act (COPPA), websites and online services must disclose that they collect and share information about children 12 or younger, and must get parental permission before gathering that information from kids. As Reuters reported in October, the FTC is trying to update these  rules to "further restrict companies and websites that target youths or are geared to young audiences."

To find out how the latest batch of kids' apps were doing, privacy-wise, FTC staff examined hundreds sold in both the Apple App Store and the Google Play store, the distribution point for most Android apps. Investigators sought out privacy disclosure information in three locations: On the app store description page, inside the app itself and on the promotional Web page published by the developer or publisher.

Beyond the fact that only 20 percent of reviewed apps disclosed "any information about the app's privacy practices," the FTC indicates there were some particular red flags.

"The results showed that many of the apps shared certain information with third parties — such as device ID, geolocation, or phone number — without disclosing that fact to parents. Further, a number of apps contained interactive features — such as advertising, the ability to make in-app purchases, and links to social media — without disclosing these features to parents prior to download."

Nearly 60 percent of the studied apps were sending data back to the developer or an ad network, analytics firm or other third party.

When it comes to in-app purchases, 17 percent of the reviewed apps allowed kids to make purchases at prices ranging from 99 cents to $29.99. "Although both stores provided certain indicators when an app contained in-app purchasing capabilities, these indicators were not always prominent and, even if noticed, could be difficult for many parents to understand."

Although the study focused on individual apps, it's clear that the FTC holds Apple and Google responsible for the privacy protection of its app-buying customers. 

"All of the companies in the mobile app space, especially the gatekeepers of the app stores, need to do a better job," said FTC Chairman Leibowitz. "We'll do another survey in the future and we will expect to see improvement."

The Association for Competitive Technology, an advocacy group representing more than 5,000 app developers and IT firms, responded to the FTC report, saying "we still have a lot to do."

"For the past year, we have educated hundreds of app developers around the country on best practices for privacy and developed new transparency icons," said ACT executive director Morgan Reed in an emailed statement. "The message from the FTC today is that they appreciate our work, but we still have a lot to do."

Morgan did say that the FTC "missed" a few key areas of progress, however. 

"Apple and the other platforms are moving developers away from using device-specific identifiers that can be unified across apps and services, and are introducing alternatives to limit tracking that are app-specific for sharing with advertisers and other third parties," he said. "This will make it very difficult to combine information based on these ID's across multiple apps or the Web."

He also pointed out that now, platforms are providing "very granular tools" in order to prevent apps from accessing geolocation and other certain data, regardless of the app itself.

The FTC says it would like to hear from parents who have complaints on this or any other issue concerning "fraudulent, deceptive, and unfair business practices," so feel free to reach out with your own concerns, either on the FTC's online Complaint Assistant or by calling 877-FTC-HELP (877-382-4357).

Wilson Rothman is the Technology & Science editor at NBC News Digital. Catch up with him on Twitter at @wjrothman, and join our conversation on Facebook.