The FTC, Mobile Apps, Kids’ Privacy, Prices & Competition

by on February 16, 2012 · 19 comments

Today the Federal Trade Commission released a new report entitled, “Mobile Apps for Kids: Current Privacy Disclosures Are Disappointing,” which concludes that “confusing and hard-to-find disclosures do not give parents the control that they need in this area. The FTC argues that “parents need consistent, easily accessible, and recognizable disclosures regarding in-app purchase capabilities so that they can make informed decisions about whether to allow their children to use apps with such capabilities.”

It’s hard to be against the FTC’s “the more disclosure, the better” policy recommendation and I’m not about to come out against it here. But the question is: how much disclosure is enough? Reading through the report and seeing how hard the FTC hammers this point home makes me think the agency wants our app store checkout process to be littered with the pages of fine print disclosure policies that now accompany our credit card statements and home mortgage payments! Seriously, would that make us better off?

As a parent of two kids who both download countless apps on my Android phone, my wife’s iPhone, and our family’s Android tablet, I appreciate a certain amount of disclosure about what sort of information apps are collecting and how they are using it. I think Google’s Android marketplace strikes a nice balance here, providing us with the most crucial facts about what the application will access or share. Apple could do more on disclosure but the company also prides itself (to the dismay of some!) on its rigorous pre-screening process to make sure the apps in the App Store are safe and don’t violate certain privacy and security policies. Yet, as the FTC correctly points out, “the details of this screening process are not clear.” Of course, most Apple users simply don’t give a damn. They’re all too happy to let Apple just take care of it for them even if they’re not really sure what’s happening to their data behind the scenes. The more privacy-sensitive crowd wants greater disclosure and control, of course, and I’m sympathetic to that plea.  But again, how much disclosure is enough? Are you going to wade through pages of disclosure policies and privacy opt-ins before downloading that latest iteration of “Angry Birds” or “Cut the Rope”? Yeah, I didn’t think so.

Anyway, I don’t want to dwell on that. The more interested findings in the survey relate to price and market dynamics and I am hoping people don’t ignore them. After surveying the price of kids’ apps available in the Android Market and Apple App Store, the agency found that, “While prices ranged from free to $9.99, most of the 960 app store promotion pages listed a price of $0.99 or less. Indeed, 77% of the apps in the survey listed an install price of $0.99 or less, and 48% were free.  Free apps appeared to be the most frequently downloaded.” Here’s the pricing breakdown for both Android and Apple:

Folks, these are astonishing numbers. Almost 100% of the most downloaded kids apps in the Android Market are free… as in ZERO dollars and ZERO cents! And while Apple App Store prices tend to be a bit higher, 93% of apps are $2 or less.  This is one of the great consumer success stories of our time. Consumer welfare is vastly enhanced by the presence of hundred of kids apps that serve almost every interest and desire under the sun, and all for less than what you’d pay for a cup of coffee or a gallon of gas.

But wait, there’s more!!

This incredible success story is even more remarkable because of what the FTC finds next about market structure:

Staff found that hundreds of developers were responsible for the apps in the study. Staff encountered 441 unique developers in this study, only twelve of which had apps on both platforms. Only a handful of app developers were responsible for more than 10 apps in our sample. Developers with one app in our sample were popular, accounting for about 50% of all downloads/feedback ratings, even though they were responsible for only about 30% of the apps. In contrast, those developers with more than 10 apps in our sample accounted for about 1% of the feedback ratings for Apple, (and 20% of the downloads for Android) despite accounting for about 20% of all of the apps in the survey. This finding illustrates the broad and diverse nature of the mobile app marketplace.

“Broad and diverse marketplace,” you say?  That might be the understatement of the year!  I challenge you to find another part of not just our online ecosystem but indeed our entire economy that is this broad, diverse, innovate, competitive, and inexpensive.  I’m not sure that such a radically atomistic, mom-and-pop marketplace of entrepreneurs can last forever, but let’s pause and appreciate the fact that it does exist today.

Now, here’s the really interesting part of this story: This is generally what the world of kids’ online services looked like back in the late 1990s as well. It was incredibly diverse with lots of small mom-and-pop sites catering to kids and parents, often at no charge. And then along came COPPA. [Background here for those who are not familiar.] While COPPA helped address the legitimate problems a small handful of bad apples out there at the time created, it also raised serious compliance costs for that entire sector, including the many smaller mom-and-pop sites. In a letter send to the FTC back in 2005, child safety advocate Parry Aftab claimed that, “The cost of obtaining verifiable parental consent for interactive communications is very high, estimated at more than $45 per child, and even at that price difficult to obtain.” I have no idea how accurate that number was then (I think that was way too high of an estimate), or what the compliance cost per child was in the late 1990s, but let’s be conservative and say it was much smaller, perhaps less that a few bucks per child verified under COPPA.  And let’s assume that if we extended COPPA-like regulatory requirements to app stores that there would be some compliance cost. Again, even if the compliance cost was only a buck per kid, can you see how it devastating that would be to all the small mom-and-pop app developers out there who currently only get a dollar or two for their apps (assuming they charge anything at all)? Yes, it’s true that some of them use ads to offset their costs, but those ads have to pick up the tab for all their labor and development costs.  If you add new regulatory compliance costs to the mix, those mom-and-pop developers will be hit very hard. And then we will have far fewer of them. And the ones that remain will likely charge us more than the couple of bucks we pay per app today.

Further, even if the compliance cost per child gets down to a few cents (or tens of cents) per kid for large operators, it’s probably much higher for smaller operators. In other words, most of the costs here are fixed (hiring an extra employee, having lawyers review your policy, etc.), not marginal (the cost of verifying each additional kid), so it’s really hard to say what the real costs are. And with Apple and Google also taking a cut of the apps sold in the market, you really begin to see how adding on any additional compliance costs could hit the bottom lines of smaller app developers in a big way. When margins are this thin, burdensome regulatory mandates hurt even more. And sometimes they can drive you right out of business.

Which brings us back to the FTC’s role here. It’s clear that the consumer protection side of the agency has an important role to play here when it comes to ensuring consumers are better informed about data collection practices and corresponding privacy issues. But let’s not forget that the FTC was originally created as a competition agency. It’s supposed to care about market structure, competition, and consumer welfare. So, I wonder… are the folks in the FTC’s Bureau of Economics paying any attention to what their colleague are doing here? Because if we start layering on privacy regulations, all the good intentions in the world won’t be able to hold back the likely contraction and consolidation of this vibrant industry that will take place as small mom-and-pops struggle to absorb new regulatory burdens and compliance costs.

Something to think about before regulatory intervention drives up consumers prices and drives out of the market the countless entrepreneurs that make this sector so exciting–especially for parents and kids.

  • Anonymous

    My nine-year-old has an iPod touch, and I challenge the notion that cheap and free apps represent a success. Approximately 100 percent of the available apps are moronic, and the fact that they are free makes them a more readily available nuisance. Your view is like celebrating the cheapness of colas and chips. The apps contribute to stupidity and the junk food contributes to diabetes. Some success stories. Network TV is free. Yippee!

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  • Alejandro Lagos Estevez

    During my youth I found a huge secret
    group in Mexico; then I knew that after the second world war, many officers of
    the GESTAPO SS escaped to Mexico and were hidden by powerful businessmen that
    put them at the forefront of Mexico ultra-right groups. They infected since
    millions of Mexican youth with the insane ideas of Hitler. Anyone notice the
    presence of this huge group, because they now attacked in secret, using a
    powerful weapon: total infiltration of all groups and all institutions in all
    countries of the world. In Mexico, they lead the death squads to kill alike to
    criminals and political opponents throughout Latin America. I’ve escaped
    several assassination attempts, but is becoming increasingly more difficult. I
    guess no one lives forever.

    I send a summary that I sent to some
    Americans; I hope that you know people that can stop or at least denounce
    efficiently on the internet these beasts that soon extenderan the violence
    beyond Latin America.

    I wish them luck.


    El Yunque



    What no one of the poor in Latin America
    knows is that there is a huge Nazi conspiracy in Latin America. Directs a group
    of powerful businessmen in Mexico that uses the group “El Yunque” to
    direct all the Nazi groups in Latin America. This control is made public
    through the group called “ODCA (Organization of Christian Democrats) that
    is responsible for all Latin American Nazi groups are coordinated to be and act
    according to the ideas of the YUNQUE.


    El Yunque is the secret police of the
    PAN (National Action Party) which is the party in power in Mexico.


    What is the purpose of the YUNQUE? They
    have many, but the two serve as the main group of espionage and aggression
    against all political opponents of the PAN and also used to attack anyone who
    gets in the plans of entrepreneurs related to the YUNQUE. This includes the
    assault on workers who demand the fair and the assault on journalists and
    people who are publicly opposed to the PAN. And of course, is the same case in
    other Latin American countries, but the benefit of entrepreneurs and local
    fascist political parties. The second major objective of which is to gain
    economic control, social, political and religious from around the world, to
    deliver all that power to the group of powerful businessmen who operate from
    the shadows of the PAN.

    carry out its plan to dominate the world, use of university student or shipping
    of all types of agents to create cells in other countries (particularly in
    Latin America) then infiltrate and take the leadership of any political
    institution; religious and social system that can (and took power in Mexico)
    (In addition to using electronic fraud in Mexico, using the counting of votes
    in software created by a company which is a partner in the “president of Mexico
    Felipe Calderón ) We call on the YUNQUE “control from the ground. So get
    full control of all groups of society, which used to reach their goals and
    attack, undermine and crush all opposition. A very effective and tactical
    support with so much economic power, it is impossible to stop.


    In secret meetings of the anvil, the
    speakers insisted that they were chosen by God to lead the world, with the
    mission to “establish the kingdom of God on earth” and that to
    succeed requires the United States to conquer. (here referred to an achievement
    based on the infiltration of leadership positions in all social groups,
    religious and political leaders of the United States)


    I do not know what solution there is to
    it. They are unstoppable. But we must never surrender to them, for you, for all
    children whose souls are being destroyed, for the freedom we are losing our
    families unknowingly … The Nazis are powerful, but the peoples of Latin
    America are people of free spirit and creative, that find a way to save our








    El Yunque’s uniform changes with the
    area. Is the most widely used is: white shirt and trousers in black men and
    white blouse and black skirt for women. In areas heavily infested with the
    anvil in Guadalajara, the uniform is like the brown shirts of Hitler.


    The banner also changes depending on the
    area, ranging from the classic Nazi salute to a variation of the greeting used
    by ancient Roman soldiers.


    Flags of the YUNQUE are usually two: In
    the senior used the Nazi flag from Hitler and the meetings of lower-level uses
    the black flag with white uncírculo in the center where the svastica is
    replaced with a “Y” stylized .


    Basic YUNQUE cells are formed by about
    three to six people and are called “centers” center meetings are in
    the house of the head of school or classroom for private schools.


    Meetings of leaders of the anvil are
    made on ranches owned by key leaders of the PAN.


    The “retreat” for
    indoctrination and brainwashing in ranches are members of the PAN of minor


    YUNQUE cells meet once a week to receive
    orders and deliver reports and generally relating to espionage and attack
    political opponents. They usually read books written by members of the YUNQUE.


    Everyone on the anvil as used pseudonyms
    and the names of saints are forbidden to ask the real name of other members of
    the YUNQUE.


    Any member of the YUNQUE questioning the
    acts and orders of the YUNQUE and is punished severely in case of rebellion or
    disobedience, is the rebel assault, beatings and some serious accidents, which
    seem to “accidents of fate” from other centers of YUNQUE. This in
    order to soften them and make them more docile.


    El YUNQUE recruit millions of children
    and adolescents in public and private schools, and the recruits who are brain
    washed well, send them to Catholic churches and parishes, to lead groups of
    “catechism” for children and are also sent to the colonies and
    secondary schools to form teams of informal football or basketball or karate or
    hiking, to gain the trust of children who later invited to join a secret group
    that is false and is called the anvil of the “pre”. In this study the
    false loyalty and fanaticism of the child. If the child seems viable, then
    invite him to another secret: El Yunque, where it became a recruiter, a spy who
    complained to his family without hesitation, that copy or steal documents from
    their parents and a rabid aggressor ranging from the scorn and the threat to
    terrorism and the selective assassination.


    Hence the child is given full treatment
    and was filled with a total hatred and evil towards anything other than the
    dogmas of El Yunque. To do this, children are sent to so-called
    “retreats” and dads happy life My son is saying this along with some
    very good guys! ….. Oh, if they knew with what kind of demons are dropping
    their children. They tell the child: If you disobey, we will not disobey us to
    disobey God!


    (Religious blackmail) So fanatical
    religiously to children.


    It is clear that the leaders of the PAN
    does not believe in God, but a mock practice Catholicism to use religious
    fanaticism as a powerful tool to control children and young people who believe
    in his innocence is the story that are in the name of God crimes and offenses
    are ordered to commit.


    Do not underestimate the power of
    religious fanaticism. A human being religious fanatic is capable of doing
    anything in the name of God. Remember the terrorist acts committed by the
    terrorist group Hezbollah, which the most common is that these people are
    operating with powerful explosives in the middle of crowds. How can a man be
    convinced that it is good to massacre women and children? Because the leaders
    of these groups know how to use a malicious logic and a wry sense of religion,
    mixed with extortion for creating a slave morality of absolute loyalty. Just
    prefer to recruit young people and children, because the minds of them is clean
    of any kind of malice, it is easy to make them fall into his frightening lies
    and deceptions.


    Understand this: most people and youth who
    are used to recruit children and youth in the YUNQUE were fanatical and have
    total faith and allegiance to the YUNQUE and it is by faith that they will not
    hesitate to do anything to convert your children in servants fans YUNQUE. And
    if you believe that killing and terrorizing serve God, then they will. And they
    do, from the shadows, with the full support of the power of the wealthiest
    businessmen in Mexico and with the support of the PAN and its political allies.


    This is an appalling crime. As it is possible
    that these Nazi beasts can, with impunity total self-owners of the children of
    Mexicans! What kind of people would be so suicidal and stupid to allow a group
    of gangsters to take control of their children? Why the leaders of these
    corrupt pimps hide behind secrecy and intimidation in order to indoctrinate
    children? That’s obvious: because they know what they do is a dreadful evil.




    El Yunque in the Catholic Church


    El Yunque has managed to enter the
    Catholic Church for many years. The main tactic of the YUNQUE to bring into the
    church is the selection of players Yunque most fanatical in the religious
    aspect and order them to enter the seminary with the intent to be priests and
    to achieve to reach senior positions in the church. All this is done with the
    aim of using the church to support the aims and plans of the YUNQUE. Moreover,
    by using occasional ceremonies in secret and priests in training camps and
    brainwashing leaders allows the YUNQUE to create the impression of innocence
    and sanctity of their activities, allowing them to earn a huge facility will of
    children and young Latin Americans, being very fervent in their religious


    Girls and young women are the ones that
    are more easily affected by such evil and treacherous strategy.

    Very common is that players Yunque come
    to the churches and parishes to volunteer to teach catechism and to lead groups
    in the “youth mission” They do this as explained above, to earn the
    trust of children and young people, to recruit in El Yunque.


    Not all the church is infiltrated. Proof
    of this was that Cardinal Adolfo Suarez Rivera, in Nuevo Leon faced leaders to
    demand that the PAN not to recruit children and young people in the secret
    police panista (El Yunque) as children and adolescents do not have enough
    experience to know what is right or not, and El Yunque is a very radical group,
    which operates in secret, will definitely not be allowed such wickedness.


    PAN local leaders insulted him and
    warned him not to get involved in policy matters. After this meeting, the
    cardinal was the victim of threats and was pressured by other leaders of the
    church in Mexico that serve the PAN.


    The priests linked to more YUNQUE in
    Mexico are:


    The Bishop of Leon Guanajuato, Jose
    Guadalupe Martin Rábago


    Morelia Michoacan Archbishop Alberto Suarez Inda.


    Texcoco Bishop Carlos Aguiar Retes


    The bishop of Piedras Negras Cohauila;
    Alonso Gerardo Garza Treviño.


    The Archbishop of Chihuahua, Jose
    Fernandez Arteaga


    The Archbishop of Puebla; Rosendo Huesca


    The archbishop of hermosillo sonora;
    José Ulises Macías Salcedo


    Bishop Luis Morales Reyes, San Luis Potosi


    Bishop Mario De Gasperín Gasperín of Querétaro.


    Ramon Godinez Flores of Aguascalientes.


    Javier Navarro Rodríguez, San Juan de los Lagos


    Carlos Suárez Cazares, Zamora.


    Cardinal Norberto Rivera Carrera, Archbishop Primate of Mexico.


    Archbishop Emilio Belaunzarán Berlier, Yucatan.


    Cardinal Juan Sandoval Iñiguez of Guadalajara.


    Bishop umpteenth Cepeda of Ecatepec.


    Father Marcial Maciel Degollado (founder
    of the Legionaries of Christ)




    “The Legionaries of Christ
    religious sector are infested with other agents YUNQUE, and has about 500
    priests in its ranks, in addition to some 50,000 lay members.


    This grouping is controlled by the YUNQUE
    through the “Pro”




    “Children of Brazil”


    The “Pro” and “National
    Civic Action feminine” are two important groups, “mask” the
    YUNQUE in Mexico. These groups are the large social affairs department of the


    These two groups are responsible for
    various tasks, but particularly the infiltration and control of the leadership
    of a huge number of religious groups.


    These two groups are also linked to El
    Yunque a secret project that Yunque is the location of girls and boys preferred
    genes “Aryan” characteristics or unusual aggression and fanaticism,
    which can be used in the creation of an army leaders within the YUNQUE.


    When the boy or girl in question is
    located, it instructs officials to deal with Yunque deprave in all respects to
    that person and when the pregnant young woman leaves, he is encouraged to go to
    certain associations that are responsible for seeking parents to the baby. Of
    course, these groups are controlled by Provida and the baby ends up being taken
    by members dl YUNQUE, which are responsible for raising him as a leader of a
    monstrous bigotry. These children end up in important positions within the
    YUNQUE and the PAN.








    Acts of terrorism Yunque involve players
    YUNQUE in massacres carried out in many parts of Mexico against groups of
    peasants who “hindered” to politicians and landowners of the PAN.


    PAN agents also were involved in the
    “Tlatelolco massacre” the famous October 2.


    Other crimes have to do with maintaining
    the secrecy of the YUNQUE: Many students who after some years in the YUNQUE
    began to discover the secrets of evil and falsehood of that group decided to
    leave because some people, family values are so strong, that neither the more
    diabolical avalanche of lies can tear down the soul. These poor people are not
    only courageous left the YUNQUE, but sought to denounce this group among their
    acquaintances, which, when discovered by the YUNQUE is the cause of death in
    many cases. A method used by the murderers of defectors, is the boy’s suicide:
    The search for a deserter is told by his friends at the YUNQUE and you insite
    to a meeting to have a few beers and maybe do a barbecue. Place after a neglect
    of the victim in a cup and after that this is unconscious, hanging by the neck in
    the fourth. Leaving a note on the link to suicide is very convincing and even
    with the false signature identical to that of the deceased.


    Another method of killing deserters is
    to invite the victim to a last excursion to a nearby hill. (In monterrey prefer
    to use the miter Hill for this purpose) and when they reach an enormous cliff,
    simply push a vacuum the victim and tell the authorities that a friend they
    crashed. Never fails.


    No case has further describe methods
    used for deserters, suffice it to say here that for the trap to the victim,
    show a really diabolical ingenuity that takes the awkwardness of the victim.




    In the case of attacks on political
    opponents of the PAN, it is common the use of threats, destruction of private
    property, theft and copying of documents, theft of property, harassment,
    beatings, murder and all sorts of acts of terrorism targeted; murders being
    carried out attempting to make it look like accidents and acts of drug mafiosos
    common diseases or natural.




    On the YUNQUE often biologists, chemists
    and doctors in charge of secret research on biological and chemical weapons.
    These weapons are used by very ingenious devices and tactics that allow the
    murderers to attack the hidden victims, the victim most often die without
    knowing who was murdered.




    I hope this information serves to warn
    of the dire threat posed by the YUNQUE and the PAN for all.


    If you do not condemn the horrific acts
    of the anvil and the PAN, then it will be too late to stop them.






    Alejandro García Robles



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