What was the nature of the privacy-related practices that landed the health application operators in hot water?
The NY AG focused its investigation into both the app developers’ alleged misleading advertising claims, as well as their practices regarding the collection, use and sharing of personal information. Generally speaking, with respect to the app developer privacy practices, the NY AG investigation was concerned with practices that did not require users to consent to applicable privacy policies, nor agree to the collection of various forms of personal data generated through use of the applications (including age, gender, weight, heart-rate, etc.) as part of the sign-up process. Additionally, the NY AG alleged that the developers did not disclose to users that the personal information that was collected from them and shared with third-parties might not be afforded the protections required by the federal Health Insurance Portability and Accountability Act (“HIPAA”).
Furthermore, with respect to marketing practices, the NY AG investigation focused on alleged deceptive statements concerning the performance of the subject applications. Specifically, through their marketing, the application developers represented to users that the applications could turn smartphones into accurate heart rate monitors, without the requisite information and testing necessary to substantiate those marketing claims.
In accordance with the settlement, the app developers have agreed to pay $30,000 in penalties, to affect changes to their privacy practices that require that they obtain affirmative consent from consumers in order to collect, use and share personally identifying information, and to include in their marketing that the applications have not been approved by the U.S. Food and Drug Administration.
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