Q. Mobile apps are increasingly popular. Our company is developing an app that will essentially mirror our website. Are there any special protections we should consider before we go public with our mobile app?

by Gaida Zirkelbach on February 27, 2012

You’re right. Mobile applications – commonly referred to as mobile ‘apps’ – are all the rage. In fact, some 31 billion apps were downloaded to mobile devices in 2011, according to industry analyst Juniper Research. Apps are expected to generate $52 billion in revenue by 2016, the company predicts. It makes sense that more businesses are looking to join the growing mobile marketplace.

One very important thing to consider as you develop your mobile app is your company’s privacy policies. That is, the disclosure a business provides about the information it collects from consumers when the consumer visits the company’s website or mobile app.

According to a study conducted by TrustE and Harris Interactive, just 5 percent of all mobile apps provide a privacy policy. Yet, companies collect information such as location, contacts, unique device IDs, age and gender from the ever-growing number of persons downloading and using mobile apps.

As a result, regulators and attorney generals are starting to look closely at mobile app privacy practices. 

For example, the Federal Trade Commission (FTC) recently issued a report indicating that the vast majority of mobile apps intended for children offer no privacy information, and urged developers of mobile apps to provide more information on data collection. The FTC also made it clear that it plans to review whether apps violate child privacy laws.

In addition, California Attorney General Kamala Harris just announced a deal with tech giants such as Apple, Google and other mobile platforms to help ensure that mobile apps will offer privacy policies that users can read before downloading the app. It is expected that Google’s Android Marketplace, Apple’s App Store and other app platforms will make privacy policies available to an individual prior downloading the app. Also, any company with app users in California is now on notice that California is prepared to enforce the newly clarified California Online Privacy Protection Act, which requires conspicuous posting of a privacy policy.

While this deal only applies to apps in use in California, it will affect the entire marketplace – including  Florida companies. 

In light of these developments, companies offering mobile apps should be cautious and implement carefully drafted privacy policies. They should also include terms of use within mobile apps that can help to protect the company against various legal claims. 

Today, it is a best practice for companies to minimize their website risk by posting terms of use and privacy policies on their websites. The time has come for this to be a best practice for mobile apps as well. As with website legal documents, companies can ensure they implement appropriate privacy policies and terms of use for their mobile apps by taking a team approach, and having legal counsel, app developers and other key business units involved in the process.

If you are curious about the types of information that popular mobile apps are collecting, you may want to visit The Wall Street Journal’s What They Know interactive database.

This post is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this information.