FTC takes aim at mobile apps for kids

Disclosures lacking for data sharing and in-app charges

By Fred O. Williams

Games and other apps for kids may help keep the peace in the car -- but is that quick download opening you up to unexpected charges and breaches of privacy?

Despite past outcries over the practice, many mobile applications for kids -- even some billed as "free" -- allow purchases within the app that do not require parental permission, the Federal Trade Commission said in a report released Monday.

"A lot of in-app purchases use functionality that are tied back into the account on the device," said Manas Mohapatra, an FTC attorney and co-author of the report, "Mobile Apps for Kids: Disclosures Still Not Making the Grade." Charges could appear on the credit card linked to the device, or through the device's account with a mobile carrier.

And perhaps more worrisome, some kids' apps also collect personal information, including location and phone number, without clear disclosure, the FTC said.  Such data, along with a list of sites visited, can be combined by data aggregators into an extensive digital profile of your grade-schooler.

"This report shows that the mobile app industry is not taking privacy seriously," said Jeff Chester, executive director of the Center for Digital Democracy.

400 apps tested
The FTC randomly selected 400 kid-oriented apps -- 200 each from Google Play and Apple -- reviewed their disclosures and tested their functions to see if they shared information. Nearly 60 percent transmitted a device identifier to an ad network or other information databank, but only 20 percent disclosed their privacy practices.  A smaller number also shared information such as the phone number with online data tracking networks.

In addition, some apps displayed ads or connected kids to social networks without clear disclosure. The FTC report contained a screenshot showing one kid-oriented art app displaying an ad for a singles dating site. Disclosures of policies were sometimes incomplete, or were so complicated that they were hard to understand, the FTC said.

As for purchases, 17 percent had the ability to rack up charges from within the application, such as paying to go to a more exciting level in a racing game.  Some, but not all apps required an extra step before charges could begin, such as an extra password, Mohapatra said. 

Within its sample the survey found maximum in-app charges of $9.99 per purchase in the Android environment and up to $29.99 on apps used on Apple devices, he said. Minimum costs were 99 cents in apps from both stores; however, multiple purchases of relatively low-priced add-ons could cancel out their seeming low cost.

The FTC did not name companies involved, other than the two online stores through which it obtained the apps it studied. Apple and Google did not immediately respond to request for comment.

Chester said the app stores, which act as a gateway to the phone, could take a larger role in ensuring that apps provide adequate disclosures. "Google and Apple could come in like good parents and say, 'These are the rules of the road.'"

Investigations under way
The FTC report updates an earlier look at app practices the agency released in February. This time the agency will do more than study the issue, however. Investigations of unnamed industry participants are under way to see if they are violating the Children's Online Privacy Protection Act or other federal rules governing marketing practices, the agency said.

AN OFFER OF (AGE-INAPPROPRIATE) FUN
"The BEST painting program for kids!" gushed the ad for one mobile app cited in the FTC's report. The app had advertisements that put the kids one screen-tap away from a dating site.

"I think the industry is starting to get the message that they need to do something or they're going to be facing serious regulatory problems," said John M. Simpson, director of the privacy project at Consumer Watchdog.

Parents: Be watchful
What should parents do? Working through an app and playing it with their children gives a firsthand look at practices that could be worrisome -- even if not prohibited.

"Some of this comes down to parenting," Simpson said. "If I had a 4- or 5-year-old I would want to know if they were going to see advertisements -- I might not want my kids to see ads about sugary cereals."

Parents who feel intimidated by technology need to overcome that in order to exercise oversight. "Some parents think they're not as proficient (with technology) as their children, but they need to immerse themselves in what the kid is doing."

Using the app does not reveal what information is being collected and shared, however. For that, effective privacy policy disclosures need to be adopted by app suppliers. Simpson said there is discussion of requiring disclosures to adopt simpler formats, such as with nutrition labels, which would allow users to more easily understand what information is being gathered and shared by an app.

"Some of these (policies) read as if they were written by lawyers who were paid by the word," Simpson said.

Published: December 11, 2012

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