On May 9, 2013, Georgia Congressman Hank Johnson introduced the Application Privacy, Protection and Security Act of 2013 (the "Apps Act"), a bill "[t]o provide for greater transparency in and user control over the treatment of data collected by mobile applications and to enhance the security of such data."1 The collection, use and disclosure of personal information obtained from the use of mobile applications ("apps") have been the focus of recent reports and actions taken by the Federal Trade Commission ("FTC") (see our previous posting), the California Attorney General Kamala Harris (see our previous posting) and industry organizations and interest groups.2 Although these actions are evidence of increasing industry, federal and state focus on mobile privacy concerns, currently there is no single standard on which app developers may rely to develop apps that comply with applicable laws. The Apps Act, if enacted, would as described below purport to replace conflicting state laws in this area and provide a foundation for a federal standard governing the collection, use and protection of personal information via apps.
The Apps Act is the latest effort to implement some of the privacy principles set forth in the Obama Administration's policy paper entitled "Consumer Data Privacy in a Networked World: A Framework for Protecting Privacy and Promoting Innovation in the Global Digital Economy" (see our previous posting). That policy statement was released over a year ago and to date the administration has failed to have legislation passed that implements the stated policies, a number of which are similar to privacy principles already in place in other parts of the world.
The Apps Act, if enacted, would require app developers to provide notice to app users of and obtain their consent to, the terms governing the collection, use, storage and sharing of their personal data, before the app collects such personal data.3 The required notice must include (1) the categories of personal data to be collected, purposes for which the personal data will be used, and third parties with whom personal data will be shared; and (2) a data retention policy governing the duration and terms of storage of personal data, including a description of users' rights concerning the use of their personal data and the process by which users may exercise those rights.4 To cover various forms of technology and the ways in which data can be accessed, collected and processed, the Apps Act specifically provides that an app developer granting a third party access to personal data collected by an app constitutes "sharing" of the data with that third party, regardless of whether the personal data is first transmitted to the developer.5 App developers would be required to take reasonable and appropriate measures to prevent unauthorized access to personal data as well as any de-identified data collected by the app.6 App developers would also need to provide users with means of (1) notifying the developer that they intend to stop using the app; and (2) requesting that the developer stop collecting their personal data, and at the users' option, either (a) to the extent practicable, delete their stored personal data, or (b) refrain from any further use or sharing of such data.7 App developers must comply with such requests within a reasonable and appropriate time after they are received.8
The Apps Act, if enacted, would apply to persons over which the FTC has authority under Section 5(a)(2) of the FTC Act,9 but app developers may seek to qualify for a safe harbor by adopting and following a consumer privacy code of conduct related to data collected by apps, which would be consistent with Obama Administration's earlier policy statements on consumer privacy.10 Violations of the Apps Act or its implementing regulations would be treated as violations of regulations regarding unfair or deceptive acts or practices under the FTC Act,11 and state attorneys general could also bring civil actions for legal or equitable relief on behalf of state residents where there is reason to believe that state residents' interests are adversely affected by an Apps Act violation.12 The Apps Act would supersede state law provisions to the extent that they conflict, specifically relate to the treatment of personal data or de-identified data, and provide a less protective level of transparency, user control or security in the treatment of personal data or de-identified data.13
The legislation is concise and, if enacted into law, would provide some of the clear rules for the handling of personal data that consumer groups have historically sought. The Marketing Research Association ("MRA"), however, has expressed concerns with practical applications of the Apps Act for entities with unpredictable data retention needs, as well as giving the FTC power to interpret the term "de-identified data" and define the term "personal data," and then lead the enforcement of the law and the resulting regulations implementing those terms.14 The traditional arguments against opt-in type privacy policies, similar to those called for by the legislation, will likely be made by marketing groups and app developers as the debate continues.