Feds Subpoena Pandora As Part of Investigation Into App Data Sharing

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News Posted: Tue, Apr 5 2011 9:57 AM
Pandora Media Inc. said on Monday that it has been subpoenaed as part of a federal grand-jury probe into the methods smartphone software handles personal data. Pandora disclosed the subpoena in a Securities and Exchange Commission (SEC) filing, but emphasized that it is "not a specific target of the investigation." The company said:
“We were served with a subpoena to produce documents in connection with a federal grand jury, which we believe was convened to investigate the information sharing processes of certain popular applications that run on the Apple and Android mobile platforms.”
Last year several reports, including one from the Wall Street Journal, noted that both iOS and Android applications were sending information about the devices, their users and the locations of said uses to third parties, most notably advertising networks.

Pandora was one of the apps that was cited as sharing information with third parties. The app is cross-platform, and exists on Android, iOS, Windows Mobile, Palm webOS, and BlackBerry OS. The December reports focused on Android and iOS, however.

Monday's WSJ report said:
Legal experts said the probe was significant because it involved potentially criminal charges that could be applicable to numerous companies. Federal criminal probes of companies for online privacy violations are rare.

Federal laws prohibit unauthorized access to information. "This is a big hammer if the government chooses to use it," said Orin S. Kerr, a law professor at George Washington University.

Legal experts cautioned that companies rarely end up being charged with a crime in general and that the current probe could morph into a civil one, for possible violations of the Computer Fraud and Abuse Act.

Federal prosecutors can charge individuals or companies with violating the computer-fraud law either as a felony or misdemeanor and can also pursue civil charges. But legal experts said it's rare for a corporation to be end up being charged criminally in any kind of probe. More often, companies in the federal government's cross hairs reach non-prosecution or deferred-prosecution agreements that allow the targets to avoid being criminally charged in exchange for agreeing to concessions, including monetary payments or promising not to engage in future wrongdoing, among other things.

Makers of apps could also face complaints of fair and deceptive trade practices from the Federal Trade Commission. Such complaints can be aimed at companies that fail to tell customers how they're collecting information or are violating their own terms of service.

Given the large number of smartphone users, the companies could also face huge class-action lawsuits if facts emerge to support any government charges.
Many of the apps in both the Android Market and Apple's App Store are free, and ad-supported. Thus, some say, it's not that surprising that not only are the apps ad-supported, but that they are sending back such data. Nothing is free, and that part of the "deal" would appear to be part of the monetization process.

Whether or not consumers truly understand that, and if that then constitutes fraud, will be determined by this investigation.
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Hmm interesting... I know on the Android OS apps ask for permission to certain sections of your phone typically for the apps to function properly. A user has to agree for the app to access these sections to install the applications. I believe this is how they will get around any charges. Soon you will see a ToS that no one will read for each app you install which when you agree will legally allow them to use your information for their pleasure.

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... omg they going to kidnap me with my location :(, jk

But this should be somehow prevented. i always have my location service off till i need it and don't allow apps to access it either. As for other info, idk whats going on there :D

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rapid1 replied on Tue, Apr 5 2011 11:06 PM

Rofl; I listen at live365.com which does not do this. There are multiple channels for every kind of music you can think of. It is now also becoming cross platform for iOS and Android, at the moment it is through a plug in, I have no doubt it is or very shortly will be available on Android, and is trying to get approved at the app store for iOS/iPhone. I know they have been turned down and are on there second attempt with the app store, who knows where that will go. As far as Android I am positive they will be on there. Good thing as I don't use the app store or anything Apple for that matter. Either way it is great with hundreds of musical types and even singular formats per channel. By the way I have never used Pandora as somehow I figured it was an adware hub, seems I was if not partially right, I was at least partially correct!

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