The Center for Digital Democracy (CDD) and the U.S. Public Interest Research Group (USPIRG) jointly petitioned the U.S. Federal Trade Commission today to launch an immediate investigation into the mobile marketplace, focusing especially on practices that compromise user privacy. The two groups also called on the agency to "conduct a special investigation into mobile marketing privacy threats and inappropriate practices targeting children, adolescents and multicultural consumers."

Today's filing formally amended the two groups' 2006 and 2007 complaints to the commission concerning threats to consumer privacy from such online advertising practices as behavioral profiling and targeting. Those two petitions played a key role in spurring the FTC to open up an inquiry into online marketing.

In their current complaint, CDD and USPIRG request that the FTC:

  • Require True Notice and Disclosure of data collection on mobile devices.
  • Redefine "Unfair and Deceptive" practices in the mobile marketing arena.
  • Review Industry Self-Regulation.
  • Protect Youth from Unfair or Deceptive Practices on mobile devices.

"Right before the commission's eyes, many of the same consumer data collection, profiling and behavioral targeting techniques that raise concerns in the more 'traditional' online world have been purposefully migrated into the mobile marketplace," said CDD Executive Director Jeff Chester. "As our petition makes clear, mobile marketers have refined a wide range of sophisticated practices that allow them to track, analyze and target millions of Americans who increasingly rely on their phones for information."

Online marketers are well aware of the power of the mobile platform, certainly. As a Google mobile project manager recently observed, the mobile phone is "the ultimate ad vehicle. It's the first one ever in the history of the planet that people go to bed with. It's ubiquitous across the world, across demographics, across age groups. ... [I]t can know where you've been, where you've lingered, what store you stopped in, what car dealership you visited. It goes beyond any traditional advertising. ..." Left unchecked, such power can be abused, the FTC filing makes clear, which is why CDD and USPIRG are calling for immediate FTC action.

"Policies governing consumer privacy on the mobile Web have failed to keep pace with these new marketing practices," observed Ed Mierzwinski, director of consumer protection for USPIRG. "Most critically, as the user's location has become part of the data collection and targeting process, the 'mobile marketing ecosystem' -- as the industry calls it -- poses serious new threats to consumer privacy."

The new complaint examines five key aspects of mobile marketing: behavioral targeting, location-based targeting, user tracking/mobile analytics, audience segmentation and data mining. Through an analysis of industry marketing data and other sources, it offers a revealing -- and disturbing -- examination of an industry that provides mobile communications services to 267 million Americans. Mobile marketers are building profiles of these users so they can be targeted for advertising based on their behavior and their current location.

"We are well aware of the important role mobile communications are playing in our society, from politics to shopping," explained Mierzwinski. "Increasingly consumers and citizens will use their mobile devices as essential tools to engage in sensitive financial, medical and purchasing transactions. But the growth of mobile communications must be accompanied by meaningful consumer privacy and marketing policies. That's why the FTC must quickly act."

"This complaint will be an initial test for the Obama FTC," added Chester. "Instead of permitting industry practices to go unregulated and unchecked, the commission should ensure that the powerful mobile data collection and targeting system truly protects consumer interests. Given the current financial crisis in the U.S. and the growing interest of consumers to control their spending, investing, and saving, the FTC must act so individuals are fully aware and in control of their information, especially in sensitive areas involving financial and health matters, as well as those involving children and teens."