Consumer mobile app usage hit a major milestone in November, registering more than one trillion unique events according to one study.  While mobile app usage has grown 35% in 2012, consumers are watching T.V. and browsing the web at approximately the same rate that they did in 2011.  Smart retailers have taken note, and are increasingly focusing marketing efforts to mobile campaigns. 

This holiday season, for example, there are any number of mobile apps that allow consumers to compare prices amongst nearby retailers, receive special deals, receive floor plans of the stores at which they are shopping, and avoid checkout lines altogether.  Macy’s mobile app sends shoppers special deals every five minutes the shopper remains in the store.  Some drugstores now allow patrons to refill prescriptions by scanning the bottle using the drugstore’s mobile app. 

All of these conveniences have not gone unnoticed by consumers.  While 32% of consumers made holiday purchases in-store, and 19% purchased online using a computer, 47% of holiday purchases have been made using either a smartphone or tablet.  41% of mobile app purchases came after a consumer browsed products in-store. 

All of this growth, however, does not come without serious security, enforcement, and litigation risks.  One recent study detected serious security weaknesses in Android’s “application verification service,” a tool that Google intends to prevent the installation of harmful software on mobile devices.  The FTC recently released a highly publicized report indicating that many apps geared at children collect and share data about child users without their parents’ consent.  See our blog entries about this and how you should respond here.  Similarly, we recently reported on the California Attorney General’s mobile application privacy policy enforcement campaign, which now includes litigation against out-of-state mobile app providers. 

And the risks associated with mobile apps go farther than potential privacy law or COPPA violations.  Holland & Knight Partner, David Donoghue, regularly reports on the increasing number of patent troll cases targeting retailers for the use of mobile and related technology on his blog.  Approximately 40% of all data breaches experienced by U.S. companies are a result of the loss or misuse of mobile devices, often by employees. 

As mobile application usage continues to grow, it is clear that strong security measures and good counsel are critical to avoiding liability.