12/10/2012 11:58 am ET Updated Feb 09, 2013

Mobile Apps For Kids Collect, Share Phone Numbers, Location Without Parents' Consent, FTC Finds

Parents, that app your kid just downloaded may know more about him than you realize.

Dozens of mobile apps for children are collecting and sharing their personal information -- from their phone numbers to their geolocations -- with advertisers and other third parties without notifying their parents, according to a new report by the Federal Trade Commission.

The report released Monday was the second survey by the FTC looking at the privacy disclosures associated with children's apps in the Google Play and Apple's App Store. The report found that only 20 percent of apps for children disclosed any information about their privacy practices, such as the type of data they collected and who would have access to that information.

The FTC survey also found that nearly 60 percent of kids' apps shared data with third parties without disclosing that fact to parents. Such information included the location of the child's device, know as geolocation, and device identification numbers, which are strings of letters and numbers that uniquely identify mobile devices.

Such data allows advertisers to develop detailed profiles of children based on their behavior in different apps, FTC officials said.

FTC Chairman Jon Leibowitz said the study shows that children's mobile apps "siphon an alarming amount of information" from mobile devices without any parental disclosure.

"All of the companies in the mobile app space, especially the gatekeepers of the app stores, need to do a better job," he said in a statement.

Websites are required to get parental consent before collecting data from users under 13 years old. But the law that protects children's digital privacy -- the Children's Online Privacy Protection Act, or COPPA -- has failed to keep up with the growth of new technology like mobile apps and social networks, which can collect vast amounts of information and shared that data with ad networks and data brokers to provide valuable targeted advertising.

Monday's report comes as the FTC is preparing to tighten the rules on how children's personal data is collected online.

The commission's survey took the first 480 results from each app store, and randomly selected 200 apps from each to review whether they collected or transmitted information from the mobile devices.

It found that 58 percent of the apps contained advertising within the app, but only 15 percent disclosed that prior to being downloaded. And 22 percent of the apps contained links to social networks, while only 9 percent disclosed that beforehand.

The report did not single out specific apps and did not determine whether any apps violated privacy law. But the FTC is launching investigations into whether companies are violating COPPA or engaging in unfair or deceptive practices that violate the Federal Trade Commission Act.

FTC officials did not reveal which companies would be investigated, but said the reports' findings could be used in those cases, FTC officials said.

In February, the commission released its first survey of children's mobile apps, which found that dozens of such apps, from alphabet and word games to flash cards and puzzles, gave little, if any explanation of data collection and sharing practices.

In Monday's report, the FTC concluded that the mobile app industry "appears to have made little or no progress" in improving its privacy disclosures.

"It is clear that more needs to be done in order to provide parents with greater transparency in the mobile app marketplace," the report said.

Consumer groups said the report's findings showed that COPPA needs to be strengthened.

"This report reveals widespread disregard for children's privacy rules," said Jeff Chester, the executive director of the Center for Digital Democracy. "In the rapidly growing children's mobile market, companies are seizing on new ways to target children, unleashing a growing arsenal of interactive techniques, including geo-location and use of personal contact data. It is clear that there is an urgent need for the FTC to update its COPPA regulations and to engage in ongoing enforcement."