Consumer groups and regulators increasingly are turning their attention to mobile content providers and their marketing practices.
On January 8, 2009, the Mobile Marketing Association (MMA) released a revised set of "Consumer Best Practices Guidelines" addressing mobile content services in the United States. With a "primary focus" on consumer protection and privacy, the Guidelines address marketing policies and practices for a variety of communications platforms, including short code / MMS, WAP sites, and Interactive Voice Response (IVR) systems. For example, the Guidelines detail appropriate procedures for disclosing rates, terms, and conditions for subscriptions or other promotions; obtaining consent from users; and providing mechanisms for subscribers to opt-out at a later date.
On January 13, 2009, only days after the MMA issued the revised Guidelines, the Center for Digital Democracy (CDD) and the U.S. Public Interest Research Group (U.S. PIRG) filed with the Federal Trade Commission (FTC) a Complaint and Request for Inquiry and Injunctive Relief Concerning Unfair and Deceptive Mobile Marketing Practices. In the Complaint, CDD and PIRG urged the FTC to examine and take appropriate actions with respect to behavioral targeting, location-based targeting, user tracking and mobile analytics, audience segmentation, and data mining efforts in the mobile marketplace. The parties also requested that the FTC: (1) require true notice and disclosure of data collection on mobile devices; (2) redefine "unfair and deceptive" practices in the mobile marketing arena; (3) review industry self-regulation; and (4) protect youth from unfair or deceptive practices on mobile devices. The FTC has not yet acted on the Complaint.
Regulators at the state level are also focusing on mobile content and related marketing issues. As one example, Mobile Messenger Americas, Inc., a mobile content company based in California, has agreed to pay $1 million to settle an investigation by the Florida Attorney General's office. The investigation centered around complaints that the company failed to disclose the true price and terms of mobile downloads (e.g., ringtones) that were marketed as "free" or "complimentary." The assurance of voluntary compliance agreement between the Attorney General's office and Mobile Messenger Americas, Inc. requires that the price of content or services, along with other material purchase terms, be [clearly and conspicuously] disclosed on all transaction screens. The Florida Attorney General's office also entered into $1 million settlements with two other mobile content providers in 2008-MobileFunster, Inc. and Media Breakaway LLC.
As the mobile content marketplace continues to grow and diversify, we expect that regulators and legislators at both the state and federal level, as well as consumer groups, will actively monitor industry practices and take action as needed to prevent unfair and deceptive marketing and ensure that mobile consumers' privacy interests are protected.