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Children’s apps present privacy concerns by collecting data about users often without disclosing the practice to parents, according to a study released today by the Federal Trade Commission, which enforces the Children’s Online Privacy Act and the ban on deceptive advertising.

“Our study shows that kids’ apps siphon an alarming amount of information from mobile devices without disclosing this fact to parents. All of the companies in the mobile app space, especially the gatekeepers of the app stores, need to do a better job,” FTC Chairman Jon Leibowitz said in a statement.

The study, which follows another investigation of the same issue in February of this year, looked at 400 popular apps from Google Play and the App Store that marketed themselves to children. They found that just 20 percent had any sort of privacy disclosure, while nearly 60 percent sent the user’s unique device identification number to third-parties, including advertising companies and analytics providers.

A handful also transmitted geolocation and phone number.

Because device IDs are essentially unchangeable, developers and other companies can use them to compile rich individual user profiles. The FTC did not investigate what the parties receiving apps data did with it.

“We just looked at transmissions, we didn’t explore how information was used once it was received. And how the information is used is important. There are ways of using that are innocuous and there are ways that are not,” said study co-author Andy Hasty, of the FTC’s Mobile Technology Unit.

But privacy risks were clearly present, since a relatively small number of third parties received information from a large number of apps, positioning them well to create profiles of young users based on their activities across multiple apps.

The FTC also flagged some additional ethical issues the apps posed. While 58 percent of the apps included advertising, just 15 percent of those disclosed that fact prior to download. Further, 17 percent allow users — kids — to purchase virtual goods ranging in price from $0.99 to $29.99. The app stores flag apps that support in-app purchasing but do it in a way that “are not always prominent” and can be “hard for many parents to understand,” the study concluded.

The FTC is pursuing a number of investigations related to privacy practices, according to Hasty. It will also release a final study in the series to see if efforts, such as the California Attorney General’s demand that all apps sold to Californians include a privacy statement, are effective. The study was conducted before that policy began being enforced.

“We want to give [those efforts] time to develop. The Mobile ecosystem is moving very, very fast. It’s gaining a lot of adoption and these problems aren’t just going to fade away,” said Hasty.

Source: FTC

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