April 27, 2011, 10:36 AM

Mobile apps spark consumer concerns about privacy

But only half have read mobile app privacy policies.

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Merchants with mobile apps need to include privacy policies that consumer can easily understand, Truste says.

38% of respondents to a new survey on mobile app privacy and security say their primary concern when using mobile apps is privacy, namely the possibility that their personal information is being transmitted to others without permission. 26% of the 1,000 U.S. adult smartphone users surveyed by Harris Interactive for privacy certification vendor Truste say security, which would include the presence of a virus or spyware on a smartphone. 19% say identity, meaning that information collected by a mobile app can be used to determine aspects of who a consumer is. And 14% say sharing, the disclosure of personal information with or without permission, such as electing to use GPS for location but then possibly having that data about where the consumer went divulged without consent.

Only 3% say they have no concerns about privacy and security when downloading and using mobile apps.

The survey also found that privacy and security concerns are more pronounced among older smartphone users than younger users. And privacy concerns may dampen willingness to download apps as those who have not downloaded any tend to be among the most concerned about privacy. Only 50% of smartphone app users have read the privacy policies of the apps they have downloaded, the survey finds.

“The thing about privacy in a smartphone context is consumers see their smartphones as very personal to them—it is attached to them, they know it has a unique number, and they don’t share it like they do a PC with the rest of their family,” says Fran Maier, president and executive chair of Truste.

Privacy on web and mobile web sites and in mobile apps is beginning to come under scrutiny from lawmakers following increased coverage of the subject in the media. Two bills, for example, have been introduced in Congress that would alter the way web and mobile site and mobile app operators design for privacy. This increasing attention to privacy means retailers must address the issue in a strong and clear fashion, Maier says.

“Retailers will not get return on investment if they are not about making privacy an important part of the value proposition of their apps,” she contends. “They will have to think about the privacy issue and build privacy protections into the app. They also have to encourage app stores to provide a way for consumers to select apps that are more private and secure.”

Of the 1,000 U.S. adult smartphone users surveyed, 32% owned an iPhone, 26% a BlackBerry, 25% a device running Android, 7% Windows Phone, and 11% others. The total does not add up to 100% due to rounding.

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