Five Legal Issues to Consider when Developing and Marketing a Mobile App

The mobile application market is hot business. Driven by the adoption of smart phones, tablets, and the lowering of data costs, the total global market for mobile application (app) technology is expected to be worth $25 billion by 2015 (source: Markets and Markets).

If you’re an entrepreneur, or even an accidental entrepreneur, and are interested in developing and marketing a mobile app, there are some legal considerations you need to be aware of that will both protect your business venture and the interests of your consumers.

Here’s what you need to know.

Follow the Law as it Applies to Starting Any Business

Starting any business, whether it’s from home, online, or on Main Street requires that you follow a series of legal and regulatory steps. From registering your business, getting a permit, deciding whether to incorporate or not, hiring employees, and so on, these 10 Steps to Starting a Business will help you check all the necessary boxes.

Know How the Apps Market is Monitored        

If you’ve ever used an app, then you know that they come under a lot of consumer scrutiny.  Negative reviews (both from consumers and experts), complaints, and bad news stories can quickly end the lifecycle of any questionable app.

The two main areas of common contention that app users and reviewers look to are app fees (are they fully disclosed at the time of download and in your terms of use?) and data privacy policies (what user information is collected and shared with others, and was it disclosed and consented to in advance?)

While regulation in the mobile market is in its infancy, online apps can fall under the scrutiny of truth-in-advertising and data privacy laws which are regulated by the Federal Trade Commission’s (FTC) Bureau of Consumer Protection.

Be Sure To Disclose all Charges

Developing a custom app can be a costly venture and if you are seeking to recoup some of your investment by associating a charge with your app (whether upfront or for future add-ons) be sure to disclose these fees clearly and in full upfront. Don’t even attempt to bury the fees in the small print, your users and reviewers won’t thank you for it.

If you anticipate that children will use your app, even if a parent was the party responsible for downloading it, it’s even more critical that you disclose your fees upfront. If a parent finds out that their children have racked-up unauthorized fees because your policy wasn’t clear, the potential business backlash can be harmful.

Develop and Communicate your Privacy Policy

According to this article by PaidContent.org, an organization called the Future of Privacy Forum Application Developer Responsible Data Use Project recently analyzed the top 30 paid apps, and discovered that 22 of them lacked even a basic privacy policy. 

It is widely considered good business practice to clearly state how you gather and protect consumer data. There are many freely available privacy policy generators online that give application developers options for customizing privacy policies that suit their specific needs and data practices.

You can also read more about how to develop a privacy policy from the SBA, and, remember, in the app world be sure to limit the legal jargon and present your policy in an easy-to-read, user-friendly manner (same goes for your fee/charges disclosure).

Privacy Laws to be Aware of If You Target Children

If your target market includes children, learn more about the Children’s Online Privacy Protection Act that governs information that online businesses (and mobile apps) collect about children under the age of thirteen.

Always Consult a Lawyer

Every situation is unique, so always consult a lawyer who specializes in privacy and consumer protection law for advice on your particular business venture.

Related Articles

• Creating a Privacy Policy for Your Online Business
• How Small Businesses Can Protect and Secure Customer Information
• Marketing to Children: Where is the Line and Who Enforces it?

About the Author

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley