Mobile gaming apps are routinely tracking users without their permission to gather real-time data, optimize the experience and drive in-app purchases, according to new report from the Center for Digital Democracy.

In response to these findings, the nonprofit privacy group is calling for an immediate investigation by the FTC and state attorneys general into the real-time monitoring of in-app behaviors and the resulting content changes designed to maximize profits. The findings are documented in a new report, "Head in the Digital Sand: How the Obama Administration?s NTIA-led Multistakeholder Effort."

?You are violating the consumer?s right to privacy if you are eavesdropping on everything that they do and you do not first, inform them and second, get their permission,? said Jeffrey Chester, executive director of the Center for Digital Democracy, Washington.

?They are engaged in surreptitiously reconstructing or changing an experience that app users have so that they will be confronted with ways to spend money,? he said. ?To the extent that this is happening in apps targeted to teens, it raises even additional concerns.

?Real-time spying, changing the user experience in order to pressure consumers to buy goods and services is an unfair and deceptive business practice, and we expect the FTC to weigh in on it.?

Broader infrastructure
The real-time surveillance issue is just one example of how the federal government's steps to address consumer privacy in mobile applications falls far short of where they should be, according to the Center for Digital Democracy.

In early 2012, the Obama administration released a blueprint for privacy in the information age that underscored the right of individuals to exercise control over what personal data companies collect from them and how they use it, the right to reasonable limits on the amount of personal data collected and retained and the right to easily understand and access a company's privacy practices.

As part of the initiative, the Department of Commerce?s National Telecommunications and Information Agency was charged with developing codes of conduct for the mobile app marketplace and working with various stakeholders to accomplish this.

However, the Center for Digital Democracy claims the NTIA process over the past year has failed to engage in the serious scrutiny and analysis required to protect consumer privacy, which is why the group undertook its own analysis of the mobile apps that resulted in the new report.

Part of the problem, according to the privacy group, is that the NTIA has focused in on the app industry without taking into account how apps are part of a broader mobile and digital monetization and marketing infrastructure. This makes it difficult to identify the most effective ways to protect privacy when users are increasingly tracked across a range of devices and are influenced by an integrated digital marketing system.

Optimization or fraudulent behavior?
The Center for Digital Democracy also takes issue with the fact that the NTIA process relies on lobbyists representing the data collection industry - which make up the vast majority of participating stakeholders - to propose and endorse policies that would potentially harm their own businesses.

The report highlights several areas where the federal government?s attempts to address mobile app privacy issues have fallen short.

For example, much research is being done within the mobile industry about how mobile devices act as extensions of their users in order to put the medium to its best use. While the Center for Digital Democracy claims this raises fundamental questions of how apps and other mobile communications influence privacy decision-making, the NTIA has not address this question.

The NTIA stakeholder process over the past year also failed to identify and analyze mobile app monetization practices, investigate the role of mobile app discoverability system for acquiring new users. It also did not consider the impact of mobile measurement methodologies on consumer privacy or address the role of real-time bidding to support app monetization strategies.

The nonprofit privacy group also questions if mobile industry groups have been forthcoming enough about the issues and future objectives they are working to address.

?The larger point is that mobile apps are part of this broader collection system and that you just can?t look at a mobile app in isolation and develop a privacy policy for it,? Mr. Chester said. ?What the report shows is that there is a wide range of data collection going on the mobile app environment.

?You could say that one person?s optimization is another person?s fraudulent behavior,? he said. ?But the industry cannot get away with, by putting a label of personalization or optimization on business practices which should be illegal and are at the very least, unethical.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York