Maryland AG Announced Settlement With Snapchat For Deceptive Marketing

Last week, the office of the Maryland Attorney General (AG) announced a settlement with Snapchat, Inc., the developer of the popular mobile app, about alleged deceptive marketing practices and violation of Federal children's privacy laws. The Maryland AG announcement:

"... Snapchat misled consumers when it represented that snaps are only temporary and will disappear after they are opened and viewed by the recipient. In fact, recipients of snaps can capture or copy them for later viewing and distribution. Consequently, consumers may have sent sensitive snaps that they intended not to be saved or seen by anyone but the recipient, only to discover that they were saved or distributed to others."

The company alleged collected and saved the names and phone numbers of contacts from the address books on app users' mobile devices, which it allegedly didn't disclose. The AG also alleged that the company knew about users under the age of 13 and failed to comply with the Children's Online Privacy Protection Act (COPPA).

Terms of the settlement require the company to stop making false representations, to stop misrepresenting the temporary nature of Snaps, to disclose to user that Snaps can indeed be saved by other users, to comply with COPPA and stop children under 13 from using its app, pay $100,000 to the State of Maryland, and to obtain users' consent before collecting and saving address book contents. Attorney General Gansler said about the settlement:

"Despite Snapchat's marketing claims to the contrary, no company can fully prevent content you send to someone else from being copied, shared or posted online... Companies that operate on the Internet or on mobile devices, especially those popular among youth, have a responsibility to protect their users' privacy and to be up front about what personal information they collect and the permanency of uploaded files."

Snapchat, Inc. acknowledged in its blog the settlement with the Maryland AG, and emphasized that it didn't save Snaps. That is little comfort to consumers who used the mobile app thinking that Snaps wouldn't be saved by anybody: the company nor other users.

The company settled similar allegations in May, 2014 with the U.S. Federal Trade Commission (FTC):

"That Snapchat stored video snaps unencrypted on the recipient’s device in a location outside the app’s “sandbox,” meaning that the videos remained accessible to recipients who simply connected their device to a computer and accessed the video messages through the device’s file directory... deceptively told its users that the sender would be notified if a recipient took a screenshot of a snap. In fact, any recipient with an Apple device that has an operating system pre-dating iOS 7 can use a simple method to evade the app’s screenshot detection, and the app will not notify the sender. That the company misrepresented its data collection practices. Snapchat transmitted geolocation information from users of its Android app, despite saying in its privacy policy that it did not track or access such information... the complaint alleges that Snapchat’s failure to secure its Find Friends feature resulted in a security breach permitting attackers to compile a database of 4.6 million Snapchat usernames and phone numbers. According to the FTC, the exposure of this information could lead to costly spam, phishing..."

The FTC also emphasized in its announcement:

"The settlement with Snapchat is part of the FTC’s ongoing effort to ensure that companies market their apps truthfully and keep their privacy promises to consumers. Under the terms of its settlement with the FTC, Snapchat will be prohibited from misrepresenting the extent to which it maintains the privacy, security, or confidentiality of users’ information. In addition, the company will be required to implement a comprehensive privacy program that will be monitored by an independent privacy professional for the next 20 years."

While $100K is a tiny fine, still I applaud the Maryland AG for its work. Consumers now know far more than otherwise. I wonder what is happening in other states. What are your opinions of the allegations? Of the Snapchat settlements?

Comments

[Chanson Roland]

The problem here goes well beyond Snapchat. The problem is this: Firms that provide services and even goods on the Internet depend in significant part or entirely on collecting and trading in their users/customers' personal information for their revenues and profits, and that is antithetical to privacy and a person having sole and exclusive property rights in his personal information. And the foregoing revenue model, of exchanging personal information for services and goods offered on the Internet, has developed because it allows Internet firms to seduce their users/customers by providing seemingly free or significantly less expensive services and goods, while taking in exchange for those goods and services their users/customers' highly valuable personal information, and that taking of their users/customers' personal information almost always occurs in misleading and otherwise deceptive and often, as in the case of Snapchat, supra, illicit ways.

So the fundamental revenue model of the Internet is antithetical to privacy and to users of the Internet owning their personal information. And this problem is only getting worse, so immoral and/or illicit trespasses upon the privacy rights and property interests that users/customers either do or ought to have in their personal information are bad and will almost certainly get worse, unless and until Americans begin to value and take seriously their privacy rights and their property interests in their personal information and insist that their privacy rights and property interests in their personal information be respected.

[George]

Roland:

Thanks for your comment. I agree with much of your statement of the problem, except things are worse. Your statement glosses over the conscious CHOICES made by both corporations and governments re the collection, storage, and resale of consumers' personal information. I say CHOICES because other options were, and still are available to pay for content delivered freely.

One option has been to require Internet users to view advertising content before viewing free content. Sadly, we a lot of this advertising PLUS the anti-privacy efforts. I also say CHOICES because the advertising industry has implemented many of these anti-privacy efforts, AND has fought for the ability to regulate itself. I also say CHOICES because early on, the U.S. FTC allowed marketing programs where consumers were automatically included; forcing consumers to opt-out. The reverse should have been implemented: consumers 9and their information) aren't included until they opt-in or subscribe or register.

George
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