Continuing its interest in the mobile apps environment, on August 1, 2014, the Federal Trade Commission (“FTC” or “Commission”) released a new Staff Report on Mobile Shopping Apps, entitled, “What’s the Deal? An FTC Study on Mobile Shopping Apps” (“Report”).5
The Report made three key recommendations:
- Apps should make clear consumers’ rights and liability limits for unauthorized, fraudulent, or erroneous transactions.
- Apps should more clearly describe how they collect, use, and share consumer data.
- Companies should ensure that their data security promises translate into sound data security practices.
The Report studied the pre-download disclosures associated with 121 unique shopping apps, all of which were free to download. Apps were divided into three categories: (1) price comparison apps; (2) deal apps; and (3) in-store purchase apps.
Of these recommendations, the Report noted that many of the apps studied did not disclose whether dispute resolution or liability limits were offered prior to download. Although the apps studied did have privacy policies, the Report called the language in the policies “vague” which could make it difficult for consumers to understand how their data was potentially being collected, used, and shared. The Report also found that the vast majority of apps studied included language on data security, although the specifics of the promises were not verified.
The FTC has prepared a number of reports focused on mobile apps in recent years, including two reports on mobile apps for kids, a guide for mobile app developers on marketing mobile apps, and a staff report on mobile payments.