Welcome to a new year of exciting privacy developments! In this month's issue of Eye on Privacy, we recap some significant developments from the end of last year, including an FTC settlement with an app developer that could impact how the collection and sharing of geolocation information from mobile users needs to be disclosed, a separate FTC settlement with a rent-to-own company accused of enabling computer spying by franchisees, Apple's successful dismissal of an iPhone app class action, and the FTC's first settlement in a mobile "cramming" case. We also take a look at recent studies of the "data broker" industry released by the Government Accountability Office and the Senate Commerce Committee, and examine how developments in this area could end up affecting a broad range of companies that would never consider themselves to be data brokers.

As always, please feel free to e-mail us at PrivacyAlerts@wsgr.com if there are any future topics you’d like to see here.


Lydia Parnes
Partner, Wilson Sonsini Goodrich & Rosati

 



T. Shapiro


M. Wolk

FTC Settlement with Flashlight App Requires Extensive Disclosures Outside of the Privacy Policy to Collect and Share Geolocation Information

By Tracy Shapiro and Michael Wolk

The Federal Trade Commission announced on December 5, 2013, that Goldenshores Technologies, LLC and its managing member, Erik M. Geidl, agreed to a proposed settlement over claims that Goldenshores, through its “Brightest Flashlight Free” mobile application, violated Section 5(a) of the FTC Act prohibiting unfair or deceptive acts and practices affecting commerce by failing to disclose that the app transmitted user data, including precise geolocation information and persistent identifiers, to third parties such as advertising networks. Under the settlement, Goldenshores must provide just-in-time disclosures outside of the privacy policy and obtain affirmative express consent from users before collecting, using, or disclosing geolocation information. Click here to read the full article.



E. Schlesinger



E. Holman

GAO and Senate Commerce Committee Release Studies Calling for Increased Oversight and Regulation of “Data Broker” Industry

By Emily Schlesinger and Edward Holman

In recent years, data-driven marketing has spread across numerous sectors of the economy. While the industry provides many benefits and conveniences for consumers by lowering the cost of products and services and helping businesses better capture customer preferences, privacy advocates and legislators are pushing for increased government regulation over companies known broadly as “data brokers.” As a result of the increased interest in additional regulation, in November 2013, the U.S. Government Accountability Office released a detailed report about the data broker industry, and the Senate Committee on Commerce, Science, and Transportation released its own report about one month later. These reports, both the product of long-running investigations into the policies and practices of companies involved in online and offline marketing and data collection, provide important insights into the potential challenges facing the industry. Click here to read the full article.



M. Staples

National Rent-to-Own Company Settles FTC Charges of Enabling Computer Spying by Franchisees

By Matthew Staples

On October 22, 2013, the FTC announced a proposed settlement of a case against Aaron’s, Inc., a national rent-to-own retailer with more than 1,800 locations in 48 states, having alleged that Aaron’s knowingly played a direct and vital role in its franchisees’ installation and use of software on rental computers that secretly monitored consumers. The FTC alleged, among other things, that the software used by Aaron’s franchisees was used on rented computers to surreptitiously track consumers’ locations, use computers’ webcams to take photographs of consumers inside their homes, take screen shots of computer users’ activities on the computers, use false registration screens to collect personal information, and record keystrokes on the computers in order to capture login credentials for email, financial, and social media accounts. Click here to read the full article.



E. Schlesinger

California Federal Judge Grants Summary Judgment to Apple, Dismissing Consumers’ iPhone App Class Action

By Emily Schlesinger

On November 25, 2013, Judge Lucy Koh of the U.S. District Court for the Northern District of California granted summary judgment for defendant Apple, Inc., dismissing claims by a class of plaintiffs claiming that they had detrimentally relied on Apple’s misrepresentations to purchase and use their iPhones and other devices in violation of California consumer protection laws. After nearly three years of litigation, Judge Koh ultimately determined that the plaintiffs lacked standing to pursue their claims because they did not establish a genuine issue of material fact that they “actually relied” on Apple’s statements that it had adhered to the company privacy policy. Click here to read the full article.



S. Bell

S. Lee

FTC Settles First Mobile "Cramming" Case

By Suzanne Bell and Sharon Lee

In November 2013, the FTC obtained a monetary judgment of more than $11 million in aggregate against Wise Media, LLC, its CEO, its owner, and an entity holding Wise Media funds, as well as a permanent injunction prohibiting Wise Media, its CEO, and its owner from placing charges on any person's telephone bill or assisting anyone else in doing so. The FTC alleged in its complaint that Wise Media had engaged in deceptive and unfair acts and practices in violation of Section 5(a) of the FTC Act by representing that consumers were obligated to pay charges for Wise Media's text message-based services that Wise Media caused to be placed on their mobile phone bills, without obtaining their express informed consent. The practice of placing unauthorized third-party charges on consumers' phone bills is known as "cramming." Click here to read the full article.


Tip

"Do Not Track” Signals – Do you know how your website collects and uses personal information? California law changed on January 1, 2014. Are you ready?

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