New Report Exposes Flaws in NTIA “Multistakeholder” Effort to Establish Privacy Safeguards: White House Must Act to Fulfill its Vision for a “Privacy Bill of Rights”/See cross-platform tracking/users as $ "whales"

By: Jeff Chester | Aug 29 2013

Washington, DC: A report released today by the Center for Digital Democracy (CDD) criticizes the Obama Administration’s recent effort to establish new privacy safeguards for the Digital Era. The more than yearlong proceeding led by the Department of Commerce’s National Telecommunications and Information Administration (NTIA) to further the Administration’s proposed “Consumer Privacy Bill of Rights” failed to ensure that the public can be protected from the array of sophisticated mobile “app” data-gathering practices. The detailed, 34-page report, “Head in the Digital Sand,” argues that the lobbyist-dominated process failed to examine the actual operations of the mobile app industry and its impact on the ability of consumers to protect their privacy effectively.

Among the most disturbing revelations is the growing use of real-time tracking and surveillance of individual mobile app users. Industry practices requiring investigation by the FTC are identified, including apps that stealthily eavesdrop on consumers to ensure they spend more on virtual goods and other services—moving them up, in industry parlance, from “minnows” to “dolphins” and then to big cash-generating “whales.”

The report examines other mobile and app-related data collection practices, including the ways users are being tracked from device to device; how app developers “acquire” and target users; the role of so-called “ad exchanges” that auction off mobile consumers to advertisers in milliseconds, through the use of data-rich profiles; so-called “monetization” practices relied on by developers; and industry research on the unique personal relationship users have with mobile devices and content.

In 2012, the White House released a privacy “blueprint” with seven “rights” that all consumers should be guaranteed, and urged Congress to enact legislation. The NTIA was also tasked with bringing industry, nonprofit organizations, and others together to develop so-called voluntary but enforceable codes of conduct to implement consumer privacy rights. However, as CDD’s report describes, the so-called “stakeholder” process failed to deliver meaningful and effective privacy safeguards.

“There was an assumption that consumers would be willing to dispassionately analyze how an app uses their data before they try it out,” explained CDD Executive Director Jeff Chester. “But as our report reveals, there is already a sophisticated app marketing system in place that actually uses existing data, along with a host of interactive marketing tactics, to influence consumer decisions. Before they download an app, consumers need to know more than just what data that app may collect or share with sponsors or third parties,” he added. “They need to be told how the app really operates—whether it spies on them, whether the app experience will change in order to promote the sales of goods and virtual products, and precisely how any personal data might be used for purposes related to finances, health, their race or age, for example.”

Last month, the NTIA hailed the work that led to a proposed “Short Form Notice Code of Conduct to Promote Transparency in Mobile App Practices.” On Thursday, August 29, the NTIA convenes a forum to address “lessons learned” about the work that produced the mobile app code and how that process should be structured for future work.

CDD called on the Administration to release its long-promised legislation on consumer privacy, and to replace the NTIA with the Federal Trade Commission as the lead agency proposing new privacy rights for Americans. “The Administration has told the European Union that it has its privacy house in order,” said Chester. “But this initial effort, as well as the revelations of NSA surveillance, raises questions about how well the privacy of Europeans will be protected as a new Transatlantic trade deal (TTIP) is negotiated.”

A copy of CDD’s new report on mobile apps and consumer privacy is available at

The Visual Appendix can be downloaded via:

CDD works to protect the interests of consumers in the digital era, focusing on issues related to consumer privacy, public health, children and youth, and financial services.

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