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Gaming's next legal hotbed
Gaming's next legal hotbed Exclusive
February 23, 2012 | By Chris Morris

It's an election year. And despite 2011's historic Supreme Court ruling, you really didn't think video games were going to be dropped from the political agenda, did you?

As predicted, privacy is fast becoming a legal hotbed — and while it's something that's certain to impact traditional game makers in one form or another, it's mobile developers who are increasingly finding themselves in the crosshairs.

A new study from the Federal Trade Commission looking at mobile apps for kids found dozens of applications failed to disclose how they use a child's personal data. And that could put them in violation of privacy laws.

"Young children and teens are increasingly embracing smart phone technology for entertainment and educational purposes," said the report. "Parents generally cannot determine, before downloading an app, whether the app poses risks related to the collection, use, and sharing of their children's personal information."

"Although the two major U.S. mobile app stores provide some information and controls governing apps, all members of the mobile app ecosystem — the app stores, the developers, and the third parties providing services within the apps — must do more to ensure that parents have access to clear, concise and timely information about the apps they download for their children."

The investigation came from increased focus on the Children's Online Privacy Protection Act (COPPA), which the FTC pushed to update last fall.

While this study focused solely on what disclosures were given to parents, the FTC plans to conduct additional checks over the next six months, which could result in COPPA violation accusations.

And those violations can be expensive. Last May, Disney-owned Playdom paid $3 million to settle charges it had illegally collected and disclosed personal information from hundreds of thousands of children under age 13 without their parents' prior consent. In August, developer Broken Thumbs Apps settled a similar case with the FTC over the child-targeted app Emily's Dress Up and Shop for a reported $50,000.

The FTC cited those settlements and the proposed rule changes in its report, noting they were "a warning call to industry that it must do more to provide parents with easily accessible, basic information about the mobile apps that their children use." It also said it plans to "evaluate whether the industry is moving forward to address the disclosure issues raised in this report" — about as clear a signal as it can give that game makers are once more under the microscope.

While the report largely pointed its finger at app makers, it didn't have a lot of kind words for either the Apple or Android app stores either.

"The app stores do not appear to enforce these requirements," it said. "This lack of enforcement provides little incentive to app developers to provide such disclosures and leaves parents without the information they need."

Apple, for its part, seems to be taking the report seriously. On Wednesday, the company signed an agreement (alongside Google, HP, and others) with the state of California to increase app privacy.

Protecting the privacy of children is an issue that few companies are likely willing to argue. There's no upside in it — financial or political. The good news for game makers is this is an issue that's unlikely to affect the content of games.

"It's less about the content in the online environment as it is in fair warning and fees," says Michael Zolandz, partner at SNR Denton. "I think that's the big issue in the commission's context. It's not so much what children are able to access. It's hidden fees or circumstances where it's a free download that then smacks you with hundreds of dollars in add-ons."

The problem is: Privacy policies are often something a company writes and forgets. As the mobile industry evolves, developers that make games and educational apps in that space are going to have to keep those policies on their radar, ensuring that their products both comply with their own rules as well as the government's — because any slip-ups could be costly ones.

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Todd Boyd
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You cannot (legally) acquire a Google/GMail/whatever account when you are that young, and this sort of account is required for Android Market access. I fail to see the problem. So... Google is supposed to make sure that children are being treated properly in their app ecosystem, and yet, the children are theoretically unable to procure the apps in question.

I suppose the children can *use* those apps, but they are not technically the customer.

Kyle Redd
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"Apple, for its part, seems to be taking the report seriously. On Wednesday, the company signed an agreement (alongside Google, HP, and others) with the state of California to increase app privacy."

That paragraph is confusingly written. Shouldn't it instead be written as "For their part, Apple, Google, and HP seem to be taking the report seriously. On Wednesday, the companies signed an agreement with the state of California to increase app privacy"?

As written it seems to single out Apple for praise even though it is doing no more or less than other mobile companies.

Adam Bishop
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I used to work for a mobile games developer. I suspect most users would be shocked to discover the volume of information that is tracked about them.

Kevin Reilly
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@ Todd, all privacy laws in the US are based on the premise that companies must provide notice and obtain consent of the user before collecting personally identifiable information. COPPA requires additional notification and parental consent when the owner of a website or App knows or should know they are collecting children's personally identifiable user information. Most game apps are rated 4 and up so it applies. In a recent report, the FTC found most developers do not have a privacy policy, fewer obtain consent from users to collect user data and most if not all collect reams of information from users including contact lists, UDID and geo-location without ever disclosing the fact.

In the wake of the Path address book debacle last week, it comes as no surprise that the largest tech companies have already determined to comply with California's requirements for more disclosure and transparency in data collection. It will only be a matter of time before all app developers will be required to have a privacy policy in place before submitting their games to an app store and provide users with standardized notices of those practices. I think Adam is correct that users will be surprised to find out the type of information the "analytics" providers are gleaning from games.

However all that being said, "privacy" online or on smartphones is sort of a joke as everything you do is logged somewhere and likely accessible without your knowledge or consent.

Ryan Creighton
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We actually require all of our players to mail us a urine sample before downloading our games ... not sure if we're violating any laws there, but the information is very useful.

Ryan Creighton
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Michael Sherman
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With all this in mind, FTC Staff Attorney Kenneth H. Abbe and State of California Special Assistant Attorney General Travis LeBlanc will be speaking the 6th annual Digital Kids Conference in Los Angeles on April 25 – 26, 2012. Both will be speaking in the Safety and Privacy in Mobile Apps session during the Digital Kids Safety Track. has the details.

In light of their recent commitments to step up enforcement in this area, Abbe and LeBalanc will address the unique set of safety and privacy concerns the mobile space presents for children and how new Children’s Online Privacy Protection Act requirements could affect compliance. They’ll help the operators of social networks, online games, mobile apps, virtual worlds, and related products and services spot risks and advise what companies need to know to develop kid-friendly apps on multiple platforms.