Representative Ed Markey’s proposed mobile legislation, scheduled to be introduced today, is the wrong way to go. It would impose rigid privacy rules on the mobile industry that can only lead to stagnation and a loss of innovative dynamism.
And what a loss that would be for such a dynamic, growing industry. According to a recent study, there were over 44,000 app-related positions open in the U.S. in the last quarter of 2011, and overall, there were 45 percent more open app positions than in the previous year. Based on this number, the study found the app economy firms represented 311,000 jobs. Using a standard multiplier, this number grew to nearly a half a million jobs created by the app economy in both direct and indirect jobs since 2007.
Rather than overregulating an industry that holds such potential for economic growth, Congress should be following the House Energy and Commerce Committee’s lead in supporting the industry. The Committee is holding a hearing today focused on apps and where the jobs are.
So if legislation isn’t the answer, what should be done? Over the summer, the National Telecommunications and Information Administration (NTIA) launched an effort to nudge stakeholders into adopting codes of conduct for mobile transparency. SIIA was supportive of this effort and remains so. But after several meetings it appears that things may be starting to drift. Some scheduled meetings have been postponed. Fortunately, discussions between various industry stakeholders, as well as discussion between industry and consumer watchdogs, are ongoing.
The industry needs to get the substantive mobile transparency discussion moving again, if not through NTIA action then separately.
It’s also important to remember that consumers are not passive victims. If they think they are being abused, they have a healthy capacity for self-defense. As the New York Times wrote last week “many consumers seem to be already taking steps to guard their personal information from data-grabbing apps. A study by the Pew Research Center, released Wednesday, found that among Americans adults who use smartphone apps, half had decided not to install applications on their mobile phones because they demanded too much personal information. Nearly a third uninstalled an application after learning that it was collecting personal information “they didn’t wish to share.” And one in five turned off location tracking “because they were concerned that other individuals or companies could access that information.”
This is good. In the absence of government mandates, and industry codes of conduct, consumers are doing some sensible things to protect themselves. But the lack of consumer trust is troubling and can only inhibit growth in the market. If consumers just say no, the whole industry suffers.
The FTC is trying to help with some guidance. Last week it published its recommendations for mobile application developers, suggesting that companies seek “express agreement” for consumer data they collect and share. Nothing is binding on companies, however, and there is no indication that these recommendations are forming the core of industry codes of conduct or best practice.
Recommendations are good. Consumer self-help is good. But the world is looking to us to show that self-regulation can work as a viable alternative to government mandates. To allow the multi-stakeholder efforts on mobile transparency to falter now would confirm their belief that only the government can set the rules of the road in this area. It is time for the industry to step up and make progress on setting its own rules of the road.
Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology. Follow the SIIA Public Policy team on Twitter at @SIIAPolicy