A complaint filed January 12 with the FTC asserts pervasive encroachments on consumer privacy through mobile marketing. It names a multitude of players in the mobile marketing "ecosystem," including Google, Yahoo, Microsoft, Nokia, TimeWarner, ATT and Verizon. The complaint, filed by the Center for Digital Democracy and the U.S. Public Interest Research Group, does not clearly demonstrate consumer injury or illegality. Nor have past complaints to the FTC about behavioral targeting—including a 2006 complaint from these privacy advocates—appeared to generate an agency response. Nonetheless, the mobile marketing industry should take notice. Behavioral targeting technology could become a political powder keg when paired with ubiquitous mobile devices and the intimacy of location monitoring.

Regulatory Implications

The complaint quotes from the marketing materials of mobile advertising companies and characterizes tracking claims as an indication of consumer "manipulation" and a "new world order." The complaint asserts that consumers are generally unaware of the presence and sophistication of tracking and ad-placement tools, and lack "granular" control over data collections. It also alleges targeting of ads to children, teens and minorities, although it does not attempt to build a case of illegality in any of these areas. The complaint encourages the FTC to recommend federal legislation if the agency finds it lacks the authority to "halt current practices that abuse consumer rights."

The FTC is not required to take any particular action in response to the complaint. Nonetheless, all businesses in the mobile marketing space should consider the following protective measures:

  • Become aware of, and consider participating in, existing self-regulatory initiatives.
  • Consider complying with the voluntary online advertising principles offered by the FTC staff in December 2007.
  • Strictly comply with the Children's Online Privacy Practice Act (COPPA), which the FTC aggressively enforces. The mere collection of a telephone number or email address from a child 12 or younger via the mobile Internet could trigger COPPA obligations.
  • Offer individuals "opt-in" choices as may be required under existing laws and regulations, such as COPPA; the FCC's rules concerning location data and Customer Proprietary Network Information (CPNI); with respect to text (SMS) messages, the federal CAN-SPAM Act and Telephone Consumer Protection Act (TCPA); and even the federal Wiretap Act, which carries civil and criminal penalties.
  • Ensure the business complies with its own privacy policy, and check that the policy is up to date, thorough, accessible and consumer-friendly.
  • Ensure that the many partners, vendors and third parties that tend to be involved in a business' mobile advertising also are in compliance with existing laws and the business' privacy policies.