Very soon, the mobile world could be hit with some heavy setbacks thanks to a new mobile privacy crackdown from the U.S. FTC. The U.S. Federal Trade Commission is ramping up to begin investigations, sanctions, fines and more across the board to stamp down on mobile privacy concerns. Their actions will likely impact big names like Google, Apple & Facebook, but will also hit thousands of smaller developers as well. Here's a quote describing the situation,

Developers rely on tools that track users’ whereabouts, surfing habits and buying preferences to pack their apps with ads and features. Yet, with vast amounts of personal data bought and sold over the Web, user privacy is at risk. Therein lies a conundrum: More fines and tighter rules to protect consumers could boost costs for small companies whose apps are fueling demand for mobile advertising, tablets and smartphones.

“Privacy measures could directly impact the development of the mobile-advertising market,” said John Jackson, an analyst at Framingham, Massachusetts-based researcher IDC. “Any legislative actions could lead to very heavy setbacks.”
There are potentially serious ramifications for some of these measures. It's possible these actions could cause small independent developers to shut down. Here's a quote with an example,

Increased enforcement and the cost of complying with new regulations could eventually push small developers out of business, Erica Sadun, an author of books on mobile-app development, said via e-mail. Even small fines can add up for fledgling companies that, according to estimates by GigaOM Pro, on average generate less than $500 a month from sales of downloadable apps.

“One-man shops may be driven under or may simply start avoiding anything that involves any user identification whatsoever,” Sadun said. “An onerous requirement would be a tipping point that could potentially sink the independent developer, and a hazy one would open them up to potential lawsuits.”
Still, the concerns addressed by the FTC are very real, and this could simply be a case of "painful, but necessary." The bottom line is there are a slew of problems cropping up across the mobile landscape ranging from poorly implemented privacy measures, to inferior safeguarding of data, to improper reporting of use of data and more. Sometimes these issues are fairly minor, like a company who doesn't post a privacy notice for their new app. Many of the biggest issues that the FTC wants to address are actually related to protecting the identity of children on the internet though. Here's another quote which explains this further,

The FTC fined W3 Innovations LLC $50,000 in 2011 for letting children publicly post personal information on message boards via apps like Emily’s Girl World.

According to an FTC review of 400 apps for kids, “most apps failed to provide any information about the data collected through the app, let alone the type of data collected, the purpose of the collection, and who would obtain access to the data. Even more troubling, the results showed that many of the apps shared certain information with third parties -– such as device ID, geolocation, or phone number -– without disclosing that fact to parents.”

More strictures are coming. The FTC’s revised Children’s Online Privacy Protection Rule, taking effect in July, will require app makers to get parental consent to collect information from children. That will result in about $10,000 in legal costs per developer, costing $270 million for makers of education apps for Apple devices alone, said Morgan Reed, executive director of the the Association for Competitive Technology, whose members include Apple, Facebook and Microsoft Corp.
Ultimately, this higher level of enforcement and these new rules are simply "growing pains." As the world is shaped by new and more disruptive mobile technology, these are changes that must be addressed in some way. Here's a final quote that really sums up the bottom line,

“We recognize that app developers are small, but their size should not excuse their responsibility to consumers, given the sensitive information they may handle,” Christopher Olsen, assistant director at the FTC’s division of privacy and identity protection, said in an interview.
In the end, it is the job of the FTC to enforce current regulations and form new ones to help protect consumers. It's a fine line they must walk to also protect the small business owners without compromising their growth.

Source: Bloomberg