ETA Updates Congress on Payments Industry Security

by Pradeep T Moudgal 0

Application developers on July 25 agreed to test their privacy notifications to determine whether their apps are collecting various types of personal information and whether the data are being shared with third parties. The agreement came after more than a year of negotiations directed by the Commerce Department’s National Telecommunications and Information Administration.


Privacy groups have complained that mobile apps often collect sensitive information without their users’ permission or knowledge. A Federal Trade Commission study last year found that only 20 percent of apps aimed at children disclosed anything about their privacy practices.

Consumer advocacy groups such as the American Civil Liberties Union, the Consumers Union, the Center for Democracy and Technology and the Electronic Frontier Foundation backed the new notification standard, which they called a modest step forward for consumer privacy.

But many of the privacy groups argued that the fact that it took a year of negotiations to reach an agreement on the narrow issue of app disclosures shows the need for comprehensive privacy protection legislation that imposes mandatory requirements on companies.

“[The code] allows applications to compete on privacy and gives consumers a tool to pick the most privacy friendly applications,” Christopher Calabrese, a legislative counsel for the ACLU, said. “The fact that it took a year to come to agreement on just this single measure, however, makes it clear that we need comprehensive privacy legislation in order to gain meaningful privacy protections for consumers. After all, we should be able to enjoy cool new technologies without giving up our privacy.”

Efforts to protect consumer privacy by limiting the information that app developers can collect and later sell to third parties are particularly important as mobile apps support payment and financial management tools and access a consumer’s account, transaction history and other vital information. Reaching an agreement to measure the extent to which app developers are abiding by their privacy notices will go a long way in maintaining the integrity of such data and the companies using it to support their apps and nothing more. What still is needed are shorter, less jargon-filled notices and a clearer message of what’s collected and how it’s used.

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