December 28, 2010 - Apple is sued by an iPhone user over the advertisements that appeared in the mobile apps, following a report outlining the working of the mobile ads.

Filed on December 23rd, the lawsuit is seeking a class-action status that would cover all the users of iPhone who’ve downloaded applications since December 2008, as reported by Bloomberg.

The complaint seems to be modeled directly on a report appearing in Wall Street Journal previous week. The report highlighted mobile applications as using similar anonymous user tracking which is used by the conventional web advertising networks for improving the relevance of display ads.

The report particularly quoted Pandora app as sending "age, gender, location and phone identifiers to various ad networks," the report further noted that the game Paper Toss "sent the phone's ID number to at least five ad companies." Both the apps (Pandora and Paper Toss), are cited in the complaint while the developers of these apps are listed as defendants along with Apple.

Documented by attorneys Avi Kreitenberg and Scott A. Kamber of KamberLaw LLC in New York for Jonathan Lalo of LA, the report alleges Apple of assigning iOS devices UDIs (Unique Device Identifiers), which "can't be blocked by users," rather says that "Apple claims it reviews all applications on its App Store and doesn’t allow them to transmit user data without customer permission."

Reportedly, the lawsuit has alleged that "the transmission of personal information is a violation of federal computer fraud and privacy laws," and also proposes that "some apps are also selling additional information to ad networks, including users’ location, age, gender, income, ethnicity, sexual orientation and political views."

A similar sensational report, published in July by the LA Times, had called for a Congressional enquiry into the policies of Apple concerning mobile ads as the report had accused Apple of spying on Apple iPhone users for tracking their "precise locations."

Advertisers versus Privacy

Apple allows its users to cop out of sharing data about their location with advertisers on its iAd network. The privacy policy of Apple addresses the data obtainable by the apps and the purpose for which they can do so. But, it seems that Apple is letting advertisers and Google to act much beyond the policies it has stated.

Apple was bawled out for setting up privacy policies which were deemed as a threat by the competing advertising networks for their revenues. As a result the company had to relax its privacy policy concerning the third party advertising networks in September. There are some other mobile platforms which haven’t stated any privacy policy as yet and don’t even perform any reviews of the apps.

Aside from the malware, the applications typically just send the general demographic info to the advertisers so that they can target specific audiences. However, tying any data (even if it’s done anonymously) to the hardware of the user has its own implications rendering the user incapable of blocking or removing the same. And this is cited as one of the most controversial and biggest issues among the advocates of privacy.

Now the trouble is that if Apple blocks all user data and/or makes any info of this kind illegal for sending to the advertising networks, it’s going to result in leaving mobile apps of least use to the advertisers and as a result erasing the ad supported business model that shores up some kinds of applications in the iOS App Store and most of the apps in Android Market of Google.

Written by SynapseInteractive Copywriting Team.