3 privacy perils in a 3G world
February 18, 2009
Tanya L. Forsheit is partner at law firm Proskauer Rose
As mobile marketing explodes, the possibilities for targeting relevant advertising increase exponentially. But the promise brings with it considerable potential perils for privacy and security compliance.
Of particular concern are (1) Federal Trade Commission and Congressional focus on collection and use of information for online behavioral marketing; (2) locational privacy concerns associated with the use of GPS and; (3) the discoverability of private data in the cloud.
The following is a thumbnail sketch of what's new on the mobile regulatory horizon.
Online behavioral marketing
Advertisers want to tap the tremendous potential of the online mobile market. Imagine if you could alert a thirsty consumer via BlackBerry to the location of a Jamba Juice just around the next corner?
The FTC and Congress are concerned, however, with the potential for misuse and abuse of consumer information in this context and the quickly-eroding distinction between personally identifiable information ("PII) and non-PII such as IP addresses and other computer or device identifiers.
On Feb. 12, the FTC issued its long-anticipated Staff Report on Self-Regulatory Principles for Online Behavioral Advertising (see story).
The FTC defines online behavioral advertising as "the tracking of a consumer's online activities over time -- including the searches the consumer has conducted, the Web pages visited, and the content viewed -- in order to deliver advertising targeted to the individual consumer's interests.
The principles provide for (1) transparency and consumer control; (2) reasonable security and limited data retention for consumer data; (3) affirmative express consent for material changes to existing privacy promises and; (4) affirmative express consent to (or prohibition against) using sensitive data for behavioral advertising.
That means that mobile marketers will be challenged to provide, on a tiny mobile device, a "clear, concise, consumer-friendly, and prominent statement that (1) data about consumers' activities online is being collected at the site for use in providing advertising about products and services tailored to individual consumers' interests and (2) consumers can choose whether or not to have their information collected for such purpose.
The FTC made clear that the principles apply equally in the mobile context.
In his concurrence, Commissioner Leibowitz noted, "The Report further clarifies that the principles should apply to information collected outside the traditional Web site context, such as through mobile devices . . . These are significant and necessary steps for enhancing consumer privacy.
But online behavioral targeting is not the only regulatory concern facing mobile marketers.
Locational privacy concerns
Google announced plans in recent weeks to launch a software application called Latitude that lets mobile phone users share their location with close contacts.
Of course, locational privacy concerns will surround any and all such attempts to monetize the tracking of every move of your "friends."
The sensitivity of such information was discussed at a panel on mobile "location-based services"during the FTC's 2008 Town Hall on mobile marketing.
Overseas, the sensibilities are keen, too.
The Egyptian government demanded that Apple disable the 3G iPhone's global-positioning system before introducing the phone in that country, arguing that GPS is a military prerogative.
Discovery concerns
Where does all the data on mobile devices go to rest?
While text messages are far more ephemeral than email, much content transmitted from and received on mobile devices is retained somewhere, by the service provider or locally on the device.
While the Electronic Communications Privacy Act prohibits service providers from disclosing such information under certain circumstances, the new e-discovery rules under the Federal Rules of Civil Procedure are largely untested in this area.
It remains to be seen how courts will react to the proliferation of potentially discoverable and often private data in the cloud. The challenges surrounding preservation and collection of such vast amounts of data are considerable.
More to come
Mobile marketers can expect much more attention from the FTC and Congress in the future.
Among other things, the Center for Digital Democracy and the U.S. Public Interest Research Group filed a complaint with the FTC in January regarding alleged deceptive and unfair practices in the mobile marketplace (see story).
And only a day after the FTC's Staff Report was released on Feb. 13, Rep. Rick Boucher (D-VA) called for Congress to take a tougher stance in regulating online behavioral advertising despite the FTC's Report. For more, just stay tuned on your iPhone or BlackBerry.
Tanya L. Forsheit is Los Angeles-based partner in the litigation and dispute resolution department of law firm Proskauer Rose LLP. Reach her at .