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FTC Announces $800,000 Settlement, Releases Mobile App Report

CONSUMER PRIVACY—U.S.

February 1, 2013

The Federal Trade Commission (FTC) today announced that it has settled with “smart journal” site Path over charges it deceived users by collecting personal information from their mobile devices’ address books without their knowledge and consent. The company is required to establish a privacy program and undergo biennial privacy assessments for 20 years. The company will also pay $800,000 to settle charges it violated the Children’s Online Privacy Protection Act by collecting children’s data without parental consent. Path issued a blog post today stating it hopes the experience can help other developers “as a reminder to be cautious and diligent” when building products. The FTC also today released both a report on mobile privacy disclosures and an education guide for app developers. The report recommends ways for “key players in the rapidly expanding mobile marketplace” to gain consumer trust by better informing them of their data practices, and the guide “encourages developers to aim for reasonable data security” and includes tips for doing so. During a media call announcing the releases, outgoing FTC Chairman Jon Leibowitz said that while some companies are doing a good job at data stewardship and consumer transparency, “if other companies don’t wake up and do the right thing, my sense is industry is far more likely to face more prescriptive policies down the road, and I don’t think it’s very far down the road.”
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