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The Federal Trade Commission recently issued warning letters to companies whose mobile applications contain cutting-edge software that can monitor consumers’ television viewing habits. The software, developed by the company Silverpush, utilizes the microphone on the user’s device to detect signals running in the background of television programming and collect information about the user’s programming interests. In its warning letters, the FTC has put app developers on notice that any false or misleading representations pertaining to their use of Silverpush technology could result in an FTC enforcement action.
More on Silverpush Technology and the FTC’s Letters
When a consumer downloads an app embedded with Silverpush’s software coding, the app will utilize the device’s microphone to listen for signals emitted by certain television programs, high frequency codes which are imperceptible to the human ear. Collecting these unique codes over time, Silverpush technology can develop a detailed log of the consumer’s television viewing habits, providing valuable – but potentially private – information that can be used for targeted advertising and analytics. Notably, the technology works even when the app bearing the software is running in the background of the device without being actively used.
Silverpush claims that, currently, no television programming received in American households is embedded with the codes necessary for the technology to work. However, the FTC made clear in its warning letters that if that were to change, app developers could be on the hook for violating the FTC Act. The letters were sent to developers of apps that are embedded with Silverpush technology but provide no notification to consumers about this particular functionality. As the FTC explained in the letters, stating or implying that their apps do not use Silverpush technology to collect users’ television viewing habits when in fact they do could violate Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices in commerce. Up to this point, the FTC’s warnings have focused on app developers. The agency has not suggested that other parties, such as television manufacturers or broadcasters, would be liable under the Act.
App developers should have a full understanding of the types of technology being employed by their apps, what information they collect from end-users, and whether that collection and use requires a specific disclosure to consumers. This is true even if the technology is developed by a third-party, such as Silverpush. As a best practice, developers should take reasonable steps to notify consumers about how their data will be tracked, collected, and used.
Given the FTC’s heightened scrutiny of Silverpush technology, developers using Silverpush or any similar technology in their apps should clearly and conspicuously disclose this functionality to consumers. As the FTC’s letters make clear, any false or misleading representations in this regard could result in an FTC enforcement action.
Arent Fox will continue to monitor this issue. For any questions on interest-based advertising or other data collection issues, please contact Sarah L. Bruno, Eva J. Pulliam, or Thorne Maginnis.