Kids Apps Target Of FTC Probe
December 10, 2012

FTC Probes Kids Apps, Finds Lack of Transparency

Michael Harper for — Your Universe Online

In early October, the operator of websites for stars like Justin Beiber, Selena Gomez and Rhianna was ordered to pay a $1 million civil penalty for violating the Children´s Online Privacy Protection Act, or COPPA. The operator, Artist Arena, was found to be violating kids' Internet privacy collecting information about the children who visited these sites, including their names, birthdays, cell phone numbers and street addresses without first obtaining the parent´s permission. 

Now, the Federal Trade Commission (FTC) has announced that they will be launching an investigation into apps that are geared towards children to identify those which also collect sensitive information from children without alerting the parents as outlined in COPPA.

The FTC has already taken a comprehensive look at both Apple and Google´s perspective app stores and have found several apps which fail to protect the information gathered from children.

In a report entitled “Mobile Apps for Kids: Disclosures Still Not Making the Grade,” the FTC found that most of the children´s apps downloaded and tested by officials were actually gathering data without alerting the user or telling them how this data would be used. And according to the study, some 60% of the apps downloaded from both stores were sharing this data with third parties.

“Most apps failed to provide any information about the data collected through the app, let alone the type of data collected, the purpose of the collection, and who would obtain access to the data,” explains the report.

“Even more troubling, the results showed that many of the apps shared certain information.”

Some of the data which was shared with other parties included the phone number associated with the device and even the exact location of the device. These findings have led FTC Chairman Jon Leibowitz to call on the “gatekeepers of the app stores“¦to do a better job.”

COPPA currently requires app developers and other forms of children's entertainment to be transparent with parents about the data being collected and shared as well as what kinds of messages the children will see.

For instance, if a children´s game for the iPhone has options to buy extra levels as well as occasional pop-up ads, the developer is required to disclose this information. According to the investigation, most of the apps in question failed to do this.

The investigation found that only 9% of the apps in question did disclose these ads and external purchases to parents. However, the FTC found that another 58% of these apps did contain these elements without notifying the parents. What´s more, of the 24 apps which claimed to be ad-free, 10 actually featured ads directed at children.

The report also found that 60% of the apps they investigated were sending a device´s unique ID number, which is commonly sent to third parties for advertising purposes. The Center for Digital Democracy, a public interest group, is also calling attention to this problem and has filed a complaint with the FTC. In this complaint, the Center for Digital Democracy specifically points to a popular app entitled “Mobbles,” an app which allows users to raise and share virtual pets. This app was found to be violating COPPA by collecting email addresses and specific location data without getting permission from parents. The app also failed to disclose their practices with parents or its users.