Social Networking App Company Path Settles FTC Privacy Complaint
One of several FTC mobile privacy efforts from outgoing chairman
By John Eggerton -- Broadcasting & Cable, 2/1/2013 1:52:55 PM
According to the FTC and Justice Department, social networking app Path agreed to pay $800,000 to settle charges that it collected personal information online from kids younger than 13 without securing their parents' consent, which violates the Children's Online Privacy Protection Act.
In a complaint filed Jan. 31 in the Northern District of California, the FTC and DOJ cited over 3,000 instances where Path collected personal information from address books using the mobile app, including names, addresses, phone numbers and email addresses. It also collected info when kids registered or accessed content, the agencies said.
Along with the $800,000 civil penalty, Path agreed to delete all info it had collected from kids younger than 13 and promised not to violate the Children's Online Privacy Protection rule in the future. It must also "implement a comprehensive privacy program, and submit to regular assessments by an independent third party." Those are similar to requirements placed on Google in an FTC settlement over online privacy issues.
Path blogged that the problem has already been corrected. "As you may know, we ask users' their birthdays during the process of creating an account," the company said. "However, there was a period of time where our system was not automatically rejecting people who indicated that they were under 13. Before the FTC reached out to us, we discovered and fixed this sign-up process qualification, and took further action by suspending any underage accounts that had mistakenly been allowed to be created."
"Over the years the FTC has been vigilant in responding to a long list of threats to consumer privacy, whether it's mortgage applications thrown into open trash dumpsters, kids' information culled by music fan websites, or unencrypted credit card information left vulnerable to hackers," said Leibowitz in a statement that had the ring of a valedictory address. "This settlement with Path shows that no matter what new technologies emerge, the agency will continue to safeguard the privacy of Americans."
The court has to accept the settlement for it to be official, though that is essentially a pro forma step.
In addition to the settlement, the FTC Friday released a new study, Mobile Privacy Disclosures, with a host of recommendations -- which could be viewed as the chairman's parting advice on how to avoid regulation. Those included "considering" a do-not-track regime for smartphones, standardized privacy policies, getting affirmative consent before accessing sensitive data -- like geolocation -- and much more.
"The FTC should be applauded for continuing down the path of voluntary recommendations that give companies flexibility to find the best solution for their particular needs," Daniel Castro, a senior analyst with Information Technology and Innovation Foundation said in a statement. "However, while some of these recommendations are in line with current industry best practices, others reflect an overemphasis on privacy at the expense of innovation."
The Future of Privacy Forum (FPF) was accentuating the positive for the most part.
"The FTC report is quite positive about many of the privacy advances that are taking place in the market," said Jules Polonetsky and Christopher Wolf, cochairs of the FPF. "The Commission likes Apple's just in time pop-ups and Limit Ad Tracking features, Google's app dashboard, industry work on icons, the FPF Design For Trust Project with designer Ilana Westerman and the California effort that got privacy links into app stores.
"The FTC doesn't propose any new requirements that would interfere [with] the success of the app ecosystem, other than urging platforms to play more of a gate keeper role. Although we do agree that platforms can do more, it is quite likely that in the near future, consumers will be accessing apps directly across not only from phones, but from computers, cars, the smart grid and elsewhere. It may be limiting for regulators and for consumers to rely on platforms to decide which programs are acceptable on your computer and elsewhere."
Also Friday, the FTC released a tip sheet for mobile app developers, calling it "a starting point to help you provide a secure experience for your users," but adding that the FTC "expects app developers to adopt and maintain reasonable data security practices."
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