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Smartphone Apps Face Grand Jury Probe Over Privacy Issues

user data

Mark Zuckerberg insists that privacy in the digital age is fleeting. But authorities have other ideas: A grand jury investigation is looking at smartphone apps that shared personal data without permission.

Various news articles have popped up over the last several months relating to private user data abuses by the developers of smartphone apps. Sometimes illegitimate apps are the source, mainly on the Android platform due to its open, un-curated nature. But many times it's also appeared that approved "official" apps have shared data about their clients—occasionally down to identifying individual phones—without coming clean to the users themselves. Now there's news that federal prosecutors in New Jersey are carrying out a grand jury investigation into a number of leading-name smartphone apps. The concerns here are about potential abuses of federal computer fraud laws.

The investigation was revealed by an official SEC filing made by Pandora, the internet music "streaming radio" service, which was served with a subpoena relating to the investigation in "early 2011." The company, meanwhile, doesn't believe it's "a specific target" and that the hunt was on an "industry-wide basis."

The Wall Street Journal, describing its earlier investigation into potential privacy abuses, suggested that violations of the Computer Fraud and Abuse Act, which could have occurred if smartphone apps shared personally identifying data with third parties (mainly advertising firms) without properly disclosing the sharing, could attract criminal charges. Violators may also face "complaints of unfair and deceptive trade practices" from the FTC. The paper quotes "legal experts" who suggest investigations such as this "rarely end up" in companies being charged with a crime—although it's possible it could become a civil suit with a pursuit of damages.

So is this ultimately a case of so much sound and fury signifying nothing? A mere investigative survey by lawmakers keen to rattle some sabers? It's timely, given recent legal scrutiny applied to Google over its alleged user privacy abuses with Google Buzz. And while the criminal angle of the investigation may never happen, it's definitely a sign that lawmakers, at least in the U.S., are in disagreement with Mark Zuckerberg's assertion that digital privacy in the online era is irrelevant.

We don't expect a move toward a digital "right to be forgotten" like that emerging in Europe. But it's possible that a number of high profile million-dollar damages civil suits will happen—thus making smartphone app writers more careful about user data.

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Related: Which iPhone Apps Are Tracking You?