Mobile App Privacy: Fight About It or Fix It?

By Jon Potter , written on July 12, 2012

From The News Desk

The mobile apps industry is America’s highest-growth industry. And the growth is justified, as mobile apps make consumers lives better. GasBuddy tells you where to find the cheapest gas in your neighborhood.  Banjo knows when your friends are socializing nearby. Uber connects you to nearby drivers-for-hire at the very moment you need a ride.

But, some think there is a darker side – that apps are accessing our personal information without permission and are exploiting our data in creepy ways. Some commentators and some in Congress are urging legislative solutions, but is that the best way to proceed? Congress specializes in high-pitched, multi-year legislative battles that pit "industry bad guys" against "consumer advocate white hats." Extreme proposals are introduced and debated for years while lawyers keep suing and innovators and investors are chilled.

But what if we had the opportunity to avoid years of lobbying and lawyering and we could make progress quicker? What would that process look like?

Today, the Obama Administration will give it a shot, when it hosts the first voluntary stakeholder discussion on mobile app privacy. The goal is to explore whether the mobile app industry and consumer advocates can jointly create voluntary guidelines for when and how consumers should be informed about apps’ practices with regard to consumer data.

Of course, many mobile apps rely on consumer data in order to deliver individualized results that are helpful and enjoyable. For example, when a music app asks what songs you like it is obvious that the information helps to build a playlist. Need consumers be formally informed of this use of data?

However, your song-preference data might be combined with ZIP Code or age data to suggest a concert in your local area, or to deliver advertisements more likely to interest you, or to encourage you to vote in an upcoming local election. Are consumers aware their data is being used in that way? How should they be informed, and when?

Trading personal information for free content is not new to consumers. Advertiser-supported media businesses have always collected audience data to identify what advertisements are most valuable.

Some believe that mobile apps advance consumer research to a new level, so perhaps it is important that app developers and publishers make it easier for consumers to understand the very clear return on their personal information investment.

Regardless of one's legal or political views, we should all agree that the large majority of app developers and publishers work hard every day to understand consumer expectations regarding data, to define and implement industry norms, and to ensure that consumers know and accept those norms. And because we hope it will further this progress, app developers welcome the government's effort to harmonize consumer expectations and mobile app transparency regarding how consumer data is collected and used.

By convening hundreds of app economy stakeholders and consumer advocates, and encouraging consensus rather than dictating rules, the Obama Administration is striking the right balance. If this process works, then in several months there should be progress toward critical agreements about when and how frequently apps should inform consumers that data is being collected, whether the communication should use consumer-friendly language or a graphical icon, and whether any data collection is so obvious that informing consumers would be unnecessary.