Developers worried about new rules for phone apps

A cellphone game for kids about U.S. geography, “Stack the States,” gets rave reviews from parents. “It would require all kinds of data sharing,” said Russell-Pinson, the founder and sole employee of Freecloud Design in Charlotte, N.C. “I would be kind of afraid to do that.” The software industry is bracing for new regulations that it says will stifle creativity and saddle small businesses with legal and technical costs to ensure their cellphone apps don’t run afoul of the rules. The cost of the changes to developers just selling educational apps for kids on Apple’s iTunes store could be as high as $271 million - nearly 100 times what the FTC has projected for all the businesses it expects to be newly covered, according to the Association for Competitive Technology, a Washington-based trade group that represents small and midsize software development companies. In a 2011 case, a mobile apps developer, W3 Innovations, paid $50,000 to settle charges it illegally collected and stored the email addresses of preteens that downloaded apps called “Emily’s Girl World” and “Emily’s Dress Up.” The technological shift from desk-bound personal computers to wireless devices is driving the FTC’s push for major revisions to the law, known as COPPA. The revisions also would expand the definition of personal information to include the location data that comes from a cellphone or tablet, the device’s unique identification number and data-tracking files known as “cookies.” As evidence for what it said was the need for updated rules, the FTC announced last week it was investigating an unspecified number of app developers which may have violated the law by gathering information from kids without their parent’s consent.