On March 17, 2016, the Federal Trade Commission (“FTC”) announced it had issued warning letters to twelve application (“app”) developers who installed in their apps software created by the company SilverPush that is capable of allowing third parties to monitor the television viewing habits of consumers. The FTC warned the developers that embedding this software in their apps without notifying consumers could violate Section 5 of the Federal Trade Commission Act (“FTC Act”).
The SilverPush software contains code that can detect through the microphone on a mobile device certain audio beacons – which are inaudible signals developed by SilverPush – embedded in television programing and advertisements and emitted by nearby televisions. The FTC explained that this function enables third parties to create a detailed log of consumers’ viewing habits, without the knowledge of consumers, by monitoring television programs or advertisements running in the background from a nearby television while a mobile device is turned on. Third parties can use this information for targeted advertising and analytics.
Even though the software has been embedded in some apps, SilverPush has stated that its audio beacons are not currently embedded in or emitted from television programming aimed at the United States. Nevertheless, the FTC issued warning letters to certain app developers that embed the SilverPush software in their mobile apps to encourage them to inform consumers that the apps could allow third parties to monitor their television viewing habits should the software start being used in the United States. The FTC further warned the developers that their apps may violate Section 5 of the FTC Act – which prohibits unfair or deceptive acts or practices – if they enable third parties to monitor the television viewing habits of U.S. consumers and if statements made to the consumers or through user interfaces indicate otherwise. The press release did not contain the names of the developers who received the warning letters.
Several days after the FTC announced the warning letters, SilverPpush stated that it may stop providing the software or may, in the alternative, alter the product. The warning letters underscore the FTC’s proactive and increasing focus on apps and mobile devices. The FTC’s press release refers app developers to its guidance in a 2013 staff report on best practices for privacy disclosures in apps. The guidance recommends that developers take responsibility for third party code integrated within an app for advertising or analytics purposes and provide truthful disclosures to consumers about information third parties collect and use. The guidance also recommends that developers make privacy policies available through an app store so that consumers can review them before downloading the app.
Reporter, Kerianne Tobitsch, New York, NY, +1 212 556 2310, ktobitsch@kslaw.com
