2/16. The Federal Trade Commission (FTC) released a report [34 pages in PDF] titled "Mobile Apps for Kids: Current Privacy Disclosures Are Disappointing". It finds that there is a "lack of information available to parents prior to downloading mobile apps for their children". See also, FTC release.

It states that FTC staff "designed and conducted a survey of the apps offered for children in the two largest U.S. app stores", Google's Android Market and Apple's App store.

The report states that "Mobile apps can capture a broad range of user information from the device automatically -- including the user's precise geolocation, phone number, list of contacts, call logs, unique device identifiers, and other information stored on the mobile device -- and can share this data with a large number of possible recipients."

See also, story titled "Representatives Question Apple About iOS Apps that Seize Address Book Data" in TLJ Daily E-Mail Alert No. 2,338, February 16, 2012.

The report continues that "These capabilities can provide beneficial services to consumers -- for example, access to maps and directions, and the ability to play interactive games with other users -- but they also can be used by apps to collect detailed personal information in a manner parents cannot detect."

The report's key findings are as follows: "While staff encountered a diverse pool of apps for kids created by hundreds of different developers, staff found little, if any, information in the app marketplaces about the data collection and sharing practices of these apps. Staff found almost no relevant language regarding app data collection or sharing on the Apple app promotion pages, and minimal information (beyond the general ``permission´´ statements required on the Android operating system) on just three of the Android promotion pages. In most instances, staff was unable to determine from the promotion pages whether the apps collected any data at all, let alone the type of data collected, the purpose of the collection, and who collected or obtained access to the data." (Footnotes omitted. Parentheses in original.)

This report also makes recommendations for private sector parties. "App developers should provide this information through simple and short disclosures or icons that are easy to find and understand on the small screen of a mobile device. Parents should be able to learn what information an app collects, how the information will be used, and with whom the information will be shared. App developers also should alert parents if the app connects with any social media, or allows targeted advertising to occur through the app." (Footnote omitted.)

It recommends that "Third parties that collect user information through apps also should disclose their privacy practices, whether through a link on the app promotion page, the developers' disclosures, or another easily accessible method."

It also recommends that "the app stores should provide a more consistent way for developers to display information regarding their app's data collection practices and interactive features".

However, the report does not make legislative recommendations.

This report also discloses that the FTC "currently is engaged in a project to update its existing business guidance, ``Dot Com Disclosures,´´ about online advertising disclosures. As part of this project, the agency will host a public workshop in 2012 to gain input from interested parties, including industry representatives, consumer groups, and consumer disclosure experts." (Footnote omitted.)

It adds that "One of the topics that will be addressed is mobile privacy disclosures, including how they can be short, effective, and accessible to consumers on small screens. Staff anticipates that the workshop discussion will spur further development in this area."

2/7. The Federal Trade Commission (FTC) send warning letters to the marketers of mobile apps that provide background screening apps. The letters warn that they may be violating the Fair Credit Reporting Act (FCRA), and that the FTC may take action against them.

See, letter to Everify, Inc., letter to InfoPay, Inc., and letter to Intelligator, Inc.

These letters warn the marketers that if they have reason to believe the background reports they provide are being used for employment screening, housing, credit, or other similar purposes, they must comply with the FCRA.

The FCRA is codified at 15 U.S.C. §§ 1681-1681x.

The letter to Everify states that "At least one of your company's mobile applications involves background screening reports that include criminal histories. Employers are likely to use such criminal histories when screening job applicants. If you have reason to believe that your reports are being used for employment or other FCRA purposes you and your customers who are using the reports for such purposes must comply with the FCRA." (Footnote omitted.)

"This is true even if you have a disclaimer on your website indicating that your reports should not be used for employment or other FCRA purposes. We would evaluate many factors to determine if you had a reason to believe that a product is used for employment or other FCRA purposes, such as advertising placement and customer lists."

The FTC letter adds that "At this time, we have not made a determination as to whether your company is violating the FCRA", and "reserves the right to take action against you based on past or future law violations". The other letters are substantially similar.

2/17. The Federal Trade Commission (FTC) filed its opposition [12 pages in PDF] to the Electronic Privacy Information Center's (EPIC) Motion for Temporary Restraining Order and Preliminary Injunction [30 pages in PDF] in the EPIC's action to compel the FTC to enforce the final Decision and Order [7 pages in PDF] dated October 13, 2011, which relates to Google's Buzz related privacy practices.

See, story titled "EPIC Sues FTC to Compel Enforcement of Google Privacy Order" in TLJ Daily E-Mail Alert No. 2,338, February 16, 2012.

The FTC filings make no attempt to defend Google's business practices, or to argue that Google is in compliance with the October order.

Nor does the FTC explain or justify why the FTC has not determined that Google is in violation of the order, or why it has not yet sought to compel Google to comply with the order.

Rather, the FTC argues procedure. However, the FTC is on solid ground. It argues that the FTC Act, which Google violated, gives the the FTC enforcement authority, but creates no private right of action for the EPIC or any other third parties. The FTC also argues that third parties to government consent decrees generally cannot enforce those decrees absent an explicit stipulation by the government to that effect.

Tuesday, February 21, is the accelerated deadline for the EPIC to file its reply to the FTC's opposition. TLJ spoke with Marc Rotenberg, head of the EPIC, on Friday, February 17. He stated that he expects the District Court to rule on the motion for a TRO and PI "next week".

This case is EPIC v. FTC, U.S. District Court for the District of Columbia, D.C. No. 12-206-ABJ.

2/17. The Securities and Exchange Commission (SEC) filed a civil complaint in the U.S. District Court (SDNY) against John Kinnucan.and Broadband Research Corporation alleging insider trading involving technology companies in violation of Section 10b of the Securities Exchange Act of 1934, and rule 10b5 thereunder.

On the same day the Department of Justice (DOJ) charged Kinnucan by criminal complaint in the same court with conspiracy to commit securities fraud, wire fraud, and securities fraud for the same alleged conduct. See, release of the U.S. Attorneys Office for the Southern District of New York.

The SEC complaint alleges "insider trading by Kinnucan and his consulting firm Broadband, which was purportedly in the business of providing to its clients legitimate research about publicly traded technology companies, but which often provided nonpublic information that Kinnucan obtained from sources inside these companies".

It alleges that Kinnucan "obtained material nonpublic information from well-placed employees at a variety of public technology companies", including F5 Networks, for which he paid in cash, meals and vacations.

It alleges that he then sold inside information to "portfolio managers and analysts at prominent hedge funds and other nationally recognized investment advisers".

The SEC stated in a release that it "has charged 22 defendants in enforcement actions arising out of its expert networks investigation, which has uncovered widespread insider trading at several hedge funds and other investment advisory firms. The insider trading has occurred in the securities of 12 technology companies -- including Apple, Dell, Fairchild Semiconductor, Marvell Technology, and Western Digital -- for illicit gains totaling nearly $110 million."

The DOJ stated in its release that Kinnucan also obtained inside information from his sources at Sandisk and Flextronics International.

The SEC case is SEC v. John Kinnucan and Broadband Research Corporation, U.S. District Court for the Southern District of New York, D.C. No. 12 CIV 1230, Judge Nathan presiding.

2/9. The U.S. District Court (EDLa) sentenced Gloria Harper to serve 30 months in prison for conspiring to defraud the Federal Communications Commission's (FCC) e-rate tax and subsidy program by providing bribes and kickbacks to school officials. The program has been plagued by waste, fraud and abuse since its creation by the FCC.

The Department of Justice (DOJ) stated in a release that "Harper conspired to provide bribes and kickbacks to school officials and employees responsible for the procurement of Internet access services at certain schools in Arkansas, Florida, Illinois and Louisiana."

The DOJ added that "in return, those individuals ceded control of the E-Rate competitive bidding process to Harper and a co-conspirator, ultimately allowing them to ensure E-Rate contracts at these schools were awarded to their companies."

See also, DOJ release of March 28, 2011, and "Tech Crime Report" in TLJ Daily E-Mail Alert No. 2,211, March 29, 2011, for information about prosecution of Harper's co-conspirators, Barrett White and Tyrone Pipkin.

FCC Chairman Julius Genachowski stated in a release that "The E-Rate program brings enormous benefits to students everywhere. I applaud today’s action by DOJ. This successful prosecution reflects the collaborative efforts of the DOJ and FCC to protect E-rate from waste, fraud, and abuse, and to deter future misconduct."

2/17. The U.S. District Court (DC) sentenced Jeng "Jay" Shih to serve 18 months in prison following his October 7, 2011, plea of guilty to conspiracy to illegally export U.S. origin computers from the U.S. to Iran through the United Arab Emirates (UAE). The Department of Justice (DOJ) stated in a release that Shih and his company "caused the illegal export of 368 units of computer-related goods to Dubai, which were later sent to Iran. Later that month, the defendants caused the illegal export of 158 additional units of computer-related goods to Dubai, which were later sent to Iran. The defendants subsequently caused an additional 185 units of computer-related goods to be illegally exported to Iran via Dubai."

2/16. Massoud Habibion, aka Matt Habibion and Matt Habi, pled guilty in the U.S. District Court (DC) to conspiracy to illegally export computers from the U.S. to Iran through the United Arab Emirates (UAE). Also, Mohsen Motamedian, aka Max Motamedian and Max Ehsan, pled guilty to obstruction of justice. The Department of Justice (DOJ) stated in a release that the two are co-owners of Online Micro LLC, and that the company "purchased 1,000 computer units from Dell Inc. for approximately $500,000" for export to Iran via the UAE. The DOJ added that the defendants illegal exports were discovered when "Dell began receiving service calls concerning Dell computer units from individuals in Iran".

2/8. The U.S. District Court (NDIll) found Hanjuan Jin guilty in a bench trial of theft of trade secrets of her former employer, Motorola Solutions. The court found her not guilty of economic espionage. The U.S. Attorneys Office (USAO) for the Northern District of Illinois stated in a release that she was a software engineer for Motorola, and that she "possessed more than 1,000 electronic and paper Motorola proprietary documents when she was stopped by U.S. customs officials as she attempted to travel on a one-way ticket to China in February 2007". The USAO also stated that she worked for Motorola from 1998 through February of 2006, when she took medical leave. She then worked in the People's Republic of China (PRC) for Sun Kaisens, a Chinese telecommunications company that developed products for the Chinese military. She then returned to Motorola, for two days, during which time she accessed "technical documents belonging to Motorola on its secure internal computer network", and then attempted to flea to the PRC with Motorola documents.

2/3. The U.S. District Court (DMd) sentenced Attila Nemeth to serve 30 months in prison following his plea of guilty on November 23, 2011, to violation of the Computer Fraud and Abuse Act (CFAA) in connection with his unauthorized accessing of the computer systems of the Marriot International Corporation. The Department of Justice (DOJ) stated in a release that "Nemeth emailed Marriott personnel, advising that he had been accessing Marriott’s computers for months and had obtained proprietary information. Nemeth threatened to reveal this information if Marriott did not give him a job maintaining the company’s computers. On Nov. 13, 2010, after receiving no response from Marriott, Nemeth sent another email containing eight attachments, seven of which were confirmed as documents stored on Marriott’s computer system. These documents included financial documentation and other confidential and proprietary information. Nemeth admitted that through an infected email attachment sent to specific Marriott employees, he was able to install malicious software on Marriott’s system that gave him a ``backdoor´´ into the system. Using the``backdoor,´´ Nemeth was able to access proprietary email and other files belonging to Marriott." He then met an undercover U.S. Secret Service agent for what he thought was a job interview, in which he further incriminated himself.

Washington's Birthday. This is a federal holiday. See, OPM list of 2012 federal holidays.

The House will not meet on the week of Monday, February 20, through Friday, February 24.

The Senate will not meet on the week of Monday, February 20, through Friday, February 24.

The House will not meet.

The Senate will not meet.

8:00 - 10:00 AM. Broadband Census News LLC will host a panel discussion titled "Cybersecurity Legislation in Congress: Where Does it Stand?". The speakers will be Ari Schwartz (Department of Commerce), Larry Clinton (Internet Security Alliance), Tommy Ross (office of Sen. Harry Reid (D-NV)), Denis Zheng (staff of Senate Homeland Security and Governmental Affairs Committee), and Joseph Menn (Reuters). The price to attend is $47.12. See, notice and registration page. This event is also sponsored by the Comcast, Google, ICF International, National Cable & Telecommunications Association (NCTA), Telecommunications Industry Association (TIA) and US Telecom.. Location: Clyde's of Gallery Place, 707 7th St., NW.

12:15 - 2:00 PM. The Federal Communications Bar Association's (FCBA) Engineering and Technical Practice Committee will host a brown bag lunch. The topic will be three federal advisory committees: the President's Council of Advisors on Science and Technology (PCAST), the NTIA's Commerce Spectrum Management Advisory Committee (CSMAC) and the FCC's Technology Advisory Committee (TAC). For more information, contact Steve Sharkey at steve dot sharkey at t-mobile dot com. Location: T-Mobile, Suite 800, 601 Pennsylvania Ave., NW, North Building.

12:15 - 2:00 PM. The Federal Communications Bar Association (FCBA) will host a brown bag lunch titled "The First Amendment in Telecom Law". The speakers will be Jacob Lewis (FCC Associate General Counsel), Chuck Tobin (Holland & Knight), Coriell Wright (Free Press), Megan Brown (Wiley Rein). For more information, contact Drew Shenkman at drew dot shenkman at hklaw dot com or Brendan Carr at Bcarr at wileyrein dot com.). Location: Holland & Knight, Suite 100, 2099 Pennsylvania Ave., NW.

Deadline for the Electronic Privacy Information Center's (EPIC) to file its reply to the Federal Trade Commission's (FTC) opposition to its Motion for Temporary Restraining Order and Preliminary Injunction [30 pages in PDF]. This action pertains to whether Google's new privacy policy, scheduled to take effect on March 1, violates the FTC's Decision and Order [7 pages in PDF] dated October 13, 2011. See, story titled "EPIC Sues FTC to Compel Enforcement of Google Privacy Order" in TLJ Daily E-Mail Alert No. 2,338, February 16, 2012.

Deadline to submit FY 2012 Form 470 to the Federal Communications Commission's (FCC) Universal Service Administration Company (USAC). This is the e-rate subsidy program's Description of Services Requested and Certification Form.

Ash Wednesday.

The House will not meet.

The Senate will not meet.

The House will not meet.

The Senate will not meet.

10:00 - 11:30 AM. The Information Technology and Innovation Foundation (ITIF) will host an event titled "Eddie Lazarus Reflects on a Dramatic Tenure as Chief of Staff of the FCC". See, notice. Location: ITIF/ITIC: Suite 610, 1101 K St., NW.

1:00 - 2:00 PM. The American Bar Association (ABA) will host a webcast event titled "From Metatags to Sponsored Ads: The Evolution of the Internet-Related Trademark Infringement Doctrine". The speakers will be Chad Doellinger (Katten Muchin Rosenman), Jennifer Mikulina (McDermott Will & Emery), and Uli Widmaier (Pattishall McAuliffe). CLE credits. Prices vary. See, notice.

The House will not meet.

The Senate will not meet.

Supreme Court conference day. See, calendar. Closed.

8:30 AM - 4:00 PM. The Department of Defense's (DOD) Defense Intelligence Agency Advisory Board will hold a closed meeting. See, notice in the Federal Register, Vol. 77, No. 10, Tuesday, January 17, 2012, at Pages 2277-2278. Location: Boling Air Force Base.

8:45 AM - 1:30 PM. The George Mason University (GMU) law school will host a conference titled "The Digital Inventor: How Entrepreneurs Compete on Platforms". There will be two panel discussions, titled "Platforms, Modularity, and Complementary Goods" and "Patent Litigation: Software Patents, Licensing, and Mobile OS Platforms". There will also be several presentations and speeches, including "Design, Institutions, and the Evolution of Platforms" and "Why Walled Gardens Isn't Inconsistent with Open Innovation: Understanding How Ecosystems Management Promotes Progress". CLE credits. Prices vary. Location: GMU law school, 3301 N. Fairfax Dr., Arlington, VA.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Public Notice (PN) [21 pages in PDF] regarding Auction 901, which will auction high cost universal service subsidies through reverse competitive bidding. It is also titled "Mobility Fund Phase I Auction". The FCC released this PN on February 2, 2012. It is DA 12-121 in AU Docket No. 12-25. See also, notice in the Federal Register, Vol. 77, No. 28, Friday, February 10, 2012, at Pages 7152-7162.

The House will meet. Votes will be postponed until 6:30 PM.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response the FCC's Public Notice (PN) regarding LightSquared's Petition for Declaratory Ruling. The FCC released this PN on January 27, 2012. See also, correction to this PN, also released on January 27. This PN is DA 12-103 in IB Docket No. 11-109 and ET Docket No. 10-142.

2/17. President Obama announced his intent to nominate Gary Loveman (Ceasars casinos) and Denise Morrison (Campbell Soup Company) to be members of the President's Export Council. See, White House news office release.

2/3. Luke McCormack will become the Department of Justice's (DOJ) Chief Information Officer (CIO) in late March. He will replace Vance Hitch, who left the DOJ in August of 2011. Eric Olson, the DOJ's Deputy CIO, is also currently the acting CIO. McCormack was previously CIO of the Department of Homeland Security's (DHS) Immigration and Customs Enforcement (ICE). See, DOJ release.

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