Kate M. Growley

The market has spoken. According to a survey conducted by privacy data management company TRUSTe®, mobile phone purchasers are now more concerned about how their phones affect their privacy than they are about the traditional selling points – including brand, weight, and screen size.

Now in its third year, TRUSTe’s annual survey interviewed hundreds of smartphone users in June. The TRUSTe findings mirror those of the Pew Internet & American Life Project, which last year determined that more than half of mobile users have uninstalled or avoided certain apps over concerns about how those apps would use their information. Unsurprisingly, these findings coincide with a growing awareness – and distaste for – mobile tracking techniques. In fact, almost half of smartphone users are more concerned about privacy on their phones than on their desktop computers.

As it turns out, the sellers are listening, particularly those in the mobile app industry. A host of industry and privacy groups have released proposed “codes of conduct” that outline best practices for mobile applications and other devices that want to track user content. TRUSTe has even teamed up with MEF – a mobile content and commerce trade organization – as well as with other telecomm and security companies to produce an app to assist none other than app developers in structuring privacy policies. All of these efforts aim to earn the trust of consumers, who are scrutinizing now more than ever what applications they download. Indeed, according to TRUSTe, over three-quarters of mobile app users will not download an application that they do not trust.

The flip-side, however, is that these same consumers are also more willing to share certain kinds of personal information. While those surveyed still hold their contacts and current location close to their chests, they are more likely to allow companies to track their web-surfing behavior. These seemingly contradictory findings suggest that transparency is paramount to gain consumer trust. That is, users appear more likely to provide app developers with access to their information if they understand how it might be used.

While the mobile industry is beginning to accommodate the shifting privacy demands of its customers, state legislatures are also getting into the act. For example, California has passed an amendment to the state’s Online Privacy Protection Act that now requires websites and data brokers that collect personal information to disclose how they handle Do-Not-Track (“DNT”) requests – alerts from web users that they do not want the websites they visit to track their online behavior. Again, the focus is on transparency. The tougher issue of whether these websites should actually abide by DNT requests has been left for another day. Although the Federal Trade Commission (“FTC”) has, as of late, stopped short of calling for legislation mandating a full-fledged DNT mechanism, it has become more vocal on the need for data brokers and the like to be more transparent in how they collect and handle user information, and has encouraged brokers to provide user-friendly means for consumers to remove their information from broker databases. The FTC has also been willing to pursue those app developers who fail to disclose exactly how their apps use consumer information. So in addition to appeasing privacy-savvy customers, self-regulatory measures that emphasize disclosure may also save app developers from running afoul of burgeoning government interest in the issue.

Amidst a swirling privacy debate, it appears that consumers, industry, and lawmakers can at least agree on one point: Transparency is crucial.