New FTC Report: Kids Apps Not Making the Grade

December 10, 2012 | A new Federal Trade Commission (FTC) report on kids and mobile apps shows that parents are still not given the information they need from app developers to determine what data is being collected from their children, how it is being shared and who will have access to it.

Mobile Apps for Kids: Disclosures Still Not Making the Grade” is a follow-up to the FTC’s first report on kids and mobile apps released in February 2012. The results from this second study, which surveyed 400 children’s apps in the Google Play and Apple App stores, found that just 20% of the apps reviewed disclose any information about the app’s privacy practices, and 60% of the apps transmit private information (such as mobile device ID, geolocation or phone number) to ad networks, analytics companies or other third parties without disclosing such practices to parents.

In addition, FTC staff found that a small number of third parties are receiving information from a large number of apps, meaning “the third parties that receive information from multiple apps could potentially develop detailed profiles of the children based on their behavior in different apps.”

"While we think most companies have the best intentions when it comes to protecting kids’ privacy, we haven’t seen any progress when it comes to making sure parents have the information they need to make informed choices about apps for their kids.  In fact, our study shows that kids' apps siphon an alarming amount of information from mobile devices without disclosing this fact to parents," said FTC chair Jon Leibowitz.  "All of the companies in the mobile app space, especially the gatekeepers of the app stores, need to do a better job.  We'll do another survey in the future and we will expect to see improvement."

Other findings from the report include: 58% of the apps reviewed contained advertising within the app, while only 15% disclosed the presence of advertising prior to download; 22% of the apps contained links to social networking services, while only 9% disclosed that fact; 17% of the apps reviewed allow kids to make purchases for virtual goods within the app, with prices ranging from 99 cents to $29.99, without prominently indicating these in-app purchasing capabilities prior to download.  

In its recommendation to the industry, the FTC urges the mobile app industry  (including app stores, app developers, and third parties providing services within the apps) to step up their efforts to ensure that parents have the key information they need to make decisions about the apps they download for their children. 

The report also urges industry to implement recommendations in the recent FTC Privacy Report including: incorporating privacy protections into the design of mobile products and services; offering parents easy-to-understand choices about the data collection and sharing through kids’ apps; and providing greater transparency about how data is collected, used, and shared through kids’ apps. FTC staff will also develop new consumer education directed to parents to help them navigate the mobile app marketplace and avoid apps that fail to provide adequate disclosures.

The FTC has also announced that it is launching non-public investigations to determine whether certain entities in the mobile app marketplace are violating the Children’s Online Privacy Protection Act (COPPA) or engaging in unfair or deceptive practices in violation of the Federal Trade Commission Act.

As a supporter of the Children’s Advertising Review Unit (CARU), the Toy Industry Association (TIA) and its members have a strong commitment to children’s privacy and support guidelines that facilitate the ability to offer fun, safe online environments for children while remaining protective of children’s privacy. Most recently, TIA’s Responsible Marketing to Children Committee submitted industry comments to the FTC on proposed COPPA revisions.

TIA will keep its members apprised of any future FTC publications regarding children and apps. For additional information, read TIA’s Checklist for Mobile Apps and Promotions – a framework for toy companies to examine and evaluate the risks and opportunities related to their app initiatives.