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Consumer Privacy and Protection in the Mobile Marketplace

Senator Jay D. Rockefeller (D-WV), Chairman of the Senate Commerce Subcommittee on Consumer Protection, Product Safety, and Insurance, held a hearing, “Consumer Privacy and Protection in the Mobile Marketplace,” on May 19, 2011, to discuss consumer privacy concerns and to explore the possible role of the federal government in protecting consumers in the mobile marketplace.  “The mobile marketplace is so new and technology is moving so quickly that many consumers do not understand the privacy implications of their actions,” Rockefeller said in his opening remarks.

Issues discussed included the Do-Not-Track Online Act of 2011,” (S. 913) introduced on May 9th by Sen. Rockefeller, which aims to offer protections to consumers by preventing Web companies from tracking Internet surfing activities that are shared with advertisers.  The bill, if passed, would legally obligate companies to honor consumers' choices and empower the Federal Trade Commission (FTC) to pursue action against companies that fail to do so, much like the Do-Not-Call telephone registry.

Sen. Rockefeller said the FTC wasn’t being “aggressive” enough on Internet privacy.  He asked David Vladeck, Director of the FTC’s Bureau of Consumer Protection, whether the agency is making sure that mobile applications comply with laws governing children’s online privacy.  Vladeck said the FTC “has a number of investigations ongoing in the mobile space, including apps aimed at children.”

Senator Mark Pryor (D-AR) stressed in his remarks that the fast-evolving mobile marketplace lacks "basic parameters and best practices," particularly governing the many third-party apps that run on mobile devices. "There seems to be an app for everything, and while their innovation and creativity have defined the mobile app space, we understand most of the app producers do not have a privacy policy.”  He added that it is "not clear Americans who own smartphones understand how their information may be used, downloaded or transferred."

Senator John Kerry (D-MA) said to the industry witnesses that their companies have contributed to incredible innovation, while stressing to regulators: "Washington, leave us alone.  But we are in a different place today."  He said that companies like Google, Apple, and Facebook need to join companies that have “already come down on the side of common sense, very restrained, simple privacy protections."  Kerry has introduced his own privacy legislation entitled, the “Commercial Privacy Bill of Rights Act of 2011” that establishes a framework to protect and control personal information, which include:

  • The right to security and accountability
  • The right to notice, consent, access, and correction of information
  • The right to data minimization, constraints on distribution, and data integrity

Senator Pat Toomey (R-PA), the new ranking member, urged lawmakers to proceed with caution.  He stressed in his opening statement that as a “general matter, I prefer to see the industry self-regulate.”  So before Congress takes action it must "find the right balance."

Catherine Novelli, Vice President of Worldwide Government Affairs for Apple, testified that the company does not knowingly collect any information on children under 13 years old.  “All location data gathered by Apple from iPhones and iPad tablet computers is anonymous and can’t be traced to individual users.  The information is used to improve the functionality of the devices,” Novelli said.

Alan Davidson, Director of Public Policy for the Americas at Google, said that the company provides parental controls to protect children and requires developers to rate the maturity level of apps offered in the Android market, Davidson said.  ‘The location information sent to Google servers when users opt in to location services on Android is anonymized and stored in the aggregate,’’ Davidson said. “It’s not tied or traceable to a specific user.”

Bret Taylor, Facebook Chief Technology Officer, said that the company has “robust privacy protections.” If customers “lose trust in a service like Facebook, they will stop using it.”

The Senate this week continues its investigative hearings into consumer privacy with respect to mobile devices.  Last week, the Senate Judiciary Subcommittee held a hearing entitled “Protecting Mobile Privacy: Your Smartphones, Tablets, Cell Phones and Your Privacy.” Committee members focused their questions on whether Apple’s or Google’s devices retain records of users’ locations without their knowledge or consent.  That hearing also looked at what protections exist on current law, where the loopholes are regarding mobile technologies, and what might be done legislatively to rectify this situation.

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