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App developers face potentially significant fines if they ignore privacy issues

The growing concern over a perceived lack of attention being paid to consumer privacy by mobile application developers comes with potential financial ramifications for the first time now that California?s attorney general office is suing Delta Air Lines over the issue.

While California?s attorney general has been focusing on mobile app privacy this year and threatening legal action, this is the first time the office is suing an app developer over the issue. The relatively new and quickly growing mobile app market could see other such suits if developers do not take the time to put an adequate privacy policy in place.

?This goes back to app developers being lazy,? said Scott Michaels, vice president at Atimi Software, Vancouver, Canada.

?In terms of workload, all you have to do it make changes to your privacy policy on the Web and add language to apps,? he said.

?The overall effort is pretty low but the overall impact is significant ? if you don?t do it, the penalties are huge.?

Users? privacy at issue
A Delta spokesman said the company does not comment on ongoing litigation.

California?s attorney general office claims Delta Air Lines is distributing a mobile app ? its Fly Delta app ? without a privacy policy, which violates the state?s Online Privacy Protection Act.

The office previously gave Delta and several other companies a 30-day notice informing them that they must conspicuously post a privacy policy laying out how personal data is being used or face legal actions.

The Delta app, which enables users to check-in and book flights, collects personal data such as the user?s name, phone number, email geographic information without informing users how Delta uses the information, according to the complaint.

A clear message
The suit seeks to stop Delta from distributing its app without a privacy policy. Delta faces penalties of up to $2,500 for each violation of the privacy policy.

?The California AG is sending a clear message to the mobile marketplace,? said Alan Chapell, co-chair of the Mobile Marketing Association?s Privacy Committee and president of Chapell and Associates. ?Make sure your apps have a privacy policy or the AG will come calling.

?Even if you don't think the information collected by your app is of a sensitive nature, the AG is saying that consumers want to have the opportunity to better understand the data collected via mobile applications,? he said.

?App developers need not necessarily be concerned. Rather, they should focus on ensuring that their apps have privacy policies as mandated by the State of California.?

The Mobile Marketing Association released app privacy guidelines earlier this year and there are other resources offering similar guidance to the marketplace.

A good reason to act
Apple has also firmed up its developer guidelines over the past year as it relates to privacy. As a result, apps can be rejected from the app store if they do not disclose what they are doing with users? private information.

The absence of a privacy policy in the Delta app may have simply been an oversight, per Mr. Michaels.

?A lot of the app development teams are newly formed groups in companies that were fast tracked to get the apps out quickly so the normal checks and balances aren?t being applied,? Atimi Software's Mr. Michaels said. ?They know they have to do this but the checks and balances aren?t in place.?

?All you have to do is make a copy of the Web policy, change a few words and you are done,? he said. ?I think the whole spirit of the law is making sure that consumers know that people are doing things with the data.

?Now, everyone will have a better reason to make sure these are there."

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