Apple, app makers hit with privacy lawsuits
Tuesday, December 28, 2010; 6:59 PM
Consumers who say their personal information has been sent to advertisers without their knowledge have launched a legal battle against Apple and the makers of some of its most popular apps, the latest skirmish in the fight over the boundaries of privacy online.
Two new class-action suits filed last week in U.S. District Court in California name the creators of Backflip, Dictionary.com, Pandora and the Weather Channel, among others, in addition to Apple. The suits follow attempts by federal regulators and lawmakers to set clear standards in the rapidly evolving - and often murky - world of digital data.
"We are in a world where every pixel that appeared on a screen could be under the control of a different party, and that really made everything much more complicated," said Marty Abrams, executive director for the Centre for Information Policy Leadership, an industry-funded think tank.
One suit was brought by KamberLaw, a firm that specializes in consumer class-action suits and digital privacy, on behalf of a California resident. The second is led by Dallas lawyer Majed Nachawati of Fears Nachawati, representing consumers in Texas and California. Both accuse the companies of violating federal privacy laws, including the wiretapping act, for their financial gain.
"Users ought to have control over the amount of data that is sent of their activities," said Jeremy R. Wilson, a lawyer with Wilson Trosclair & Lovins who is working with Nachawati on the case. "It's an invasion of their privacy, and it's done without their consent.
"Consumers are engaged in a marketplace, but it's not a fully informed market," said Dave Stampley, a lawyer with KamberLaw. "They're paying with their information and not realizing that."
Apple and Pandora declined to comment on the lawsuits Tuesday. The Weather Channel did not immediately respond to a request for comment, and Backflip and Dictionary.com couldn't immediately be reached. Several app makers told the Wall Street Journal that they only aggregate the data and do not link it to individual users.
The Mobile Marketing Association, an industry trade group, announced last week that it is is crafting privacy guidelines for data collection and use and said the industry was committed to transparency.
Washington policymakers have struggled to keep pace with the overflowing stream of information transmitted online, and mobile devices such as the iPhone represent the latest frontier. A Senate subcommittee held a hearing on the issue over the summer, and Sen. John F. Kerry (D-Mass.) has sought privacy legislation for consumers. Then, in a report this month, the Federal Trade Commission criticized the industry as "too slow" in establishing privacy standards and said it has "failed to provide adequate and meaningful protection."
The agency also found that consumers are shouldering too much of the burden in protecting themselves, particularly when privacy disclosures, if they exist, can be difficult to find and understand. It suggested allowing consumers to choose how much of their personal information to share by creating a do-not-track system similar to its popular do-not-call list.
Meanwhile, the Commerce Department issued guidelines for balancing consumer privacy with mobile innovation. The report called for a "Privacy Bill of Rights" for consumers and codes of conduct for businesses - and consequences for violating them.
The lawsuits "illustrate what consumer groups have been telling Congress, the FTC and the White House: The same rampant data collection techniques threatening privacy on the Internet have been purposely migrated to our mobile phones," said Jeffrey Chester, founder and executive director of the Center for Digital Democracy, a consumer advocacy group.
Stampley said his suit does not seek to stop the companies from accessing and distributing consumers' data. Instead, the suit is looking for greater transparency and control.
"It's not, 'Is it bad to transfer information about somebody?' " he said. "It's, 'Is it bad to do it without their knowing about it and having a choice in it?' "
Nachawati filed a separate class-action suit in September against mobile ad firm Ringleader, which developed a system to track mobile phone users as they browsed the Internet. Ringleader has said it complies with all privacy laws. That case is pending.