The App Economy: Billions in Revenue, But Privacy Concerns Edit Post

A Wall Street Journal report highlights how much more personal information is being captured and shared by social media apps and social network providers such as Facebook, along with the possible and actual risks and threats this poses for users. The report also points out the billions of dollars that are now at stake, as app users offer more personal data.
"Apps are gateways, and when you buy an app, there is a strong chance that you are supplying its developers with one of the most coveted commodities in today's economy: personal data," write the WSJ's Julia Angwin and Jeremy Singer-Vine. "Some of the most widely used apps on Facebook-the games, quizzes and sharing services that define the social-networking site and give it such appeal-are gathering volumes of personal information."
Facebook Friends, as well as users', email addresses, current location and sexual preference are among the personal details sought out by 100 of the most popular Facebook apps examined by the WSJ. One Facebook-powered Yahoo! app requests access to a person's religious and political beliefs as a condition for using it. Skype seeks out users and Facebook Friends' photos and birthdays.
The app developers say they seek out the personal information to better personalize their services and "that they are committed to protecting privacy."
The WSJ study highlights the basis for "free" services fueling growth of the Internet economy: "Facebook provides a free service that users pay for, in effect, by providing details about their lives, friendships, interests and activities. Facebook, in turn, uses that trove of information to attract advertisers, app makers and other business opportunities."
"The 'app economy,' which includes Facebook as well as smartphone apps, is estimated to have generated $20 billion in revenue in 2011 by selling downloads, advertising, 'virtual goods' and other products, according to estimates from Rubinson Partners, a market researcher," according to the WSJ.
How social media app and service providers obtain and use personal information about users and personal social networks is also fueling controversy about how personal privacy, and protecting personal privacy, is changing in the digital network information age.
The WSJ identified possible transgressions of Facebook's own rules on protecting personal privacy. Among them are:

  • The app that sought the widest array of personal information of the 100 examined, "MyPad for iPad," has a two-paragraph privacy policy that says it is "adding Privacy settings shortly." Privacy policies that describe how they collect, use and share data are required by Facebook. The app maker couldn't be reached for comment.
  • Dozens of apps allow advertisers that haven't been approved by Facebook within their apps, which enables advertisers including Google to track users of the apps, according to data collected by PrivacyChoice, which offers privacy services. Google said app-makers control which technology they use to deliver online ads.
  • Such apps as the popular quiz games "Between You and Me" and "Truths About You" sought dozens of personal details-including the sexual preferences of users and their friends-that don't appear to be used by the app in the questions it poses to users about their friends. The makers of the apps, whose quizzes ask questions like "Is your friend's butt cute?" couldn't be reached for comment. Facebook requires apps to collect only the information they need to operate.

The WSJ article comes as Facebook is preparing its highly anticipated initial public offering (IPO).

Written by Kevin Kutcher at 11:00
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