Thursday, December 30, 2010

Apple Sued Over Privacy Issues

Apple is being sued by a California man due to the privacy issues with some of their apps.

Jonathan Lalo filed a complaint in the U.S. District Court in San Jose, California on Thursday, December 23, because he says that Apple produces devices that give access to ad networks to allow them to track a user’s app activity without the consent of the user. The complaint that Lalo filed mentions names like Pandora, Paper Toss, The Weather Channel and

Lalo claims that this ad network tracking occurs on Apple’s iPhone and the iPad, and it allows the networks to see which applications people are downloading, how often they use them, and how long they are using them. Lalo also claims that both iPhones and iPads feature a Unique Device Identifier (UDID), a number that is specific to that device, which users cannot block, alter or delete.

According to the suit, the UDID "is now being used by ad networks to track Plaintiffs and the Class – including what apps they download, how frequently they use the apps, and for how long. Some apps are also selling additional information to ad networks, including users' location, age, gender, income, ethnicity, sexual orientation and political views."

It continues saying that due to this, Apple and the app developers both “invaded their privacy, misappropriated and misused their personal information and interfered with the operability of their mobile devices." According to Bloomberg, the suit claims that it is seeking justice on behalf of all of the Apple iPhone and iPad users who have downloaded an app between December 1, 2008 and last week.

"None of the defendants adequately informed plaintiffs of their practices, and none of the defendants obtained plaintiffs' consent to do so," one plaintiff of the lawsuit alleged.

So far, Apple has made no comment concerning the allegations.

Issues over privacy have been prevalent of late. Just last week, there was an article in the Wall Street Journal that discussed how mobile apps send certain information out without the user’s consent or knowledge and that the use was “widely and regularly” practiced by companies. The article focused on a study that examined 101 different mobile applications. It found that iPhone apps gave out more personal information without a user’s consent than Android apps did.

The Journal also included a list of the “leakiest” apps that included Pandora, Paper Toss, and TextPlus 4. These apps send out information including age, gender, ZIP codes and user IDs to several different ad networks. The information that is released the most often, which is usually either sent back to the app manufacturer or sold to an ad network, is the device’s UDID because this information allows companies to see what the owner does with his or her device.

The article in the Journal spurred the Mobile Marketing Association to decide that new, more specific privacy guidelines need to be devised that inform consumers about what information is being released to advertisers and how it is being utilized.

Right now there are two separate suits going on. One deals with the
iPhone, and the other deals with the iPad. A partner in the Fears & Nachawati law firm and the attorney of one of the complainants Majed Nachawati said that he would not be surprised if at some point the cases were consolidated into one case by the judges that are presiding over the cases.

Nachawati also said, "We are also looking at Google's Android platform and a lawsuit against them has not been ruled out.”

After these privacy issues have been made known to the public, there now seems to be a growing concern about users' privacy on social networking sites such as Facebook and Twitter.

Despite the filing of the two separate lawsuits, some experts are predicting that the court cases will not be successful.

In April Apple did amend its developer agreement to ban all apps from sending user data to third parties unless it was information that was directly necessary for the functionality of the app.

The lawsuits say though that Apple really hasn’t taken any steps to implement or enforce the changes that they have made due to the criticism that they received from advertising networks.

Trip Chowdhry, a research analyst for Global Equities Research, said that he does not think that the lawsuits will have a big impact on investors.

“If this were a major issue, all web browsers would have to shut down and there would not be any advertising on the Internet,” Chowdhry said.

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