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The FTC Goes Mobile

by WilliamRothbard on October 15, 2012 · 17 comments

As the world goes mobile, so does the Federal Trade Commission (FTC).

Earlier this year, the Commission held a public workshop to hear and discuss ideas for updating its “Dot-Com Disclosures” guidelines (created in 2000) to fit the new world of digital marketing, including social media and mobile advertising. Proposed revisions are expected to be out for public comment before the end of the year. Meanwhile, in an interim attempt to respond to the marketing chaos surrounding the tsunami of “apps” now flooding mobile devices, the FTC recently published a guidance document for app developers entitled, “Marketing Your Mobile App: Getting It Right from the Start.”

It’s a primer on truth-in-advertising standards and basic privacy principles for a burgeoning industry of mostly 20-somethings who probably have thought as much about FTC compliance as they have about planning for retirement. While intended for the “uninitiated,” it also could serve as a refresher on elementary FTC advertising and privacy standards for the more experienced direct response marketer. It’s available at www.ftc.gov.

The publication offers the following advertising guidance:

  • Tell the truth about what your app can do. An app developer needs to understand that just about anything it says about its product – whether on a website, in an app store, or within the app itself – is a claim, and anything it doesn’t say that’s material to a buying decision could be a misleading omission. Objective claims for an app require solid proof (“competent and reliable evidence”) before they’re made, and if it’s a health or safety claim, it may need to be competent and reliable scientific evidence. Also, the meaning of a claim is what the “reasonable consumer” thinks. Look at your advertising from the perspective of “average users,” not app experts. The FTC already has taken action against app developers who made unsubstantiated claims their apps could treat acne, and no doubt is already on the prowl for its next app targets.
  • Disclose key information “clearly and conspicuously.” The tight space constraints of mobile platforms present unique challenges in complying with this basic FTC requirement, and for the FTC itself in developing effective disclosure guidelines. Nevertheless, whatever new guidance the FTC gives to mobile advertisers in its revamped “Dot-Com Disclosures,” undoubtedly it will be aimed at ensuring that material disclosures about an app or other product are big and clear enough for average users to notice and understand them.

On privacy, the publication tells apps developers to:

  • Practice “privacy by design.” Incorporate privacy protections into your practices and default settings by limiting data collection, securely storing data, and getting express user consent for non-apparent data collection or sharing.
  • Be transparent. Be up front about your data collection and sharing practices.
  • Honor your privacy promises. Whatever assurances your privacy policy provides about data security or use of personal information, live up to them. In the dozens of privacy cases already brought by the FTC, most have been for broken privacy promises or broad privacy statements that failed to disclose the extent of data collection/sharing. Avoid these pitfalls and you will decrease your odds of being the target of an FTC privacy action yourself.

full disclosure

About the author...

– who has written 29 posts on ShoeMoney.com.

William Rothbard was an attorney with the Federal Trade Commission, holding positions as an advertising enforcement attorney, Deputy Assistant Director of the Bureau of Consumer Protection, and Attorney-Advisor to FTC Chairman Michael Pertschuk. Bill has practiced law continuously since 1984, except for a two-year appointment as Counsel to the United States Senate Judiciary Committee, Subcommittee on Antitrust, Monopolies and Business Rights, in 1987-88. Bill writes a excellent blog with the latest news here.


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{ 17 comments }

1 Prince

I’ve always kind of thought that the FTC was a duel edge sword.. but for the most part it’s a good thing and it’s good that we have it for sure.

2 Jamel

You could not be more spot on when you say “20-somethings who probably have thought as much about FTC compliance as they have about planning for retirement.”

3 Rosario

Thanks for the advice William!

4 Anderson

I am surprised they have’t dont this sooner honestly.

5 Nicholas

I went and checked out William’s blog and it’s actually pretty good, I have never been to a law blog before and I liked this one. I encourage you all out there to go check it out!

6 Willie

Ahhh here we go again, more and more regulations! I agree to some extent they are good however if people are dumb enough to fall for it that’s their own fault.

7 Big Dummy

So say guy wit 160 IQ, but sum us onlee has 80 IQ an kneed helps. Not all us smarts like you. What your email, you helps me?

8 Gabriel

There are seriously getting to be waaayyy too many apps out there on the market.

9 Angelo

Interesting…

10 faisal

This is just the start. They are going to get even more strict.

11 Jess

the truth is that most people will always respect others privacy but the ones who never have never will, period

12 Kent

Guess this means I need to start reading the privacy policy and TOS for apps now.

13 Shaun

I hate when you download an app and what you thought it did was not what it really does. Thanks scammers

14 Cedrick

Great post! For all of you app developers out there just be careful. You do not want the FTC coming after you TRUST ME

15 Ted

Honesty is the best policy.

16 Saul

Can anyone make a mobile app?

17 annaliesmith

Interesting! I enjoyed reading this post I learned a little bit about sms business, This is very helpful actually.

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