Dec 1, 2011
Teams, venues and their sponsors are increasingly using geo-location services to reach customers and fans before, after and while they are attending entertainment and sporting events. For example, Stanford University announced that it is enhancing the game day experience by providing internet connectivity within venues, real-time replays and player statistics on mobile devices, mobile food ordering, mobile apps, and an in-venue mobile website. T-Mobile USA announced that it is partnering with the Los Angeles Angels to provide fans with a tablet rental program, giving fans customized content and access to mobile websites during games. Ticketmaster and Facebook now let fans see where their friends are sitting at events. Sports and entertainment companies are also using text message voting to reach fans during events and offering mobile coupons or special packages for future events, sometimes tied to a fan’s exact physical location.
Here are ten issues for in-house counsel to consider when developing a program that uses geo-location data or promotions.
1. Follow industry guidelines.
In this quickly developing space that is governed by laws that may or may not fit well with new technology, industry guidelines are a useful source of “best practices.” The Mobile Marketing Association has issued a set of guidelines that address privacy, technology standards, disclosures, and termination of programs, among other things. The Wireless Association issued guidelines specifically for location based services. The Direct Marketing Association also includes guidance for mobile initiatives within it Guidelines for Ethical Business Practices.
2. Get consent from fans for all for mobile programs.
Federal law requires that marketers obtain prior express consent before sending commercial text messages. Consent should be particular to the program being offered. Barclays Group recently settled a class action lawsuit in which the plaintiffs claimed they did not consent to receive text messages about past due credit card statements. Barclays argued that the plaintiffs provided consent to receive these types of messages when they provided cell phone numbers on the credit card application. The lawsuit was settled before the court addressed the issue of consent, but in a separate class action the Ninth Circuit has held that consent to receive commercial text messages will be narrowly construed.
3. Know what data is being collected and who can use it.
Last year the Wall Street Journal published an article called “Your Apps Are Watching You” which revealed that dozens of mobile apps collect information about consumers and their mobile devices and transmit this information to several different parties. Several lawsuits were filed against the makers of the mobile device operating systems as well as the companies that developed those apps, some of whom claimed they were not aware that the mobile apps were collecting these types of information.
4. Follow geo-location legislation.
Dozens of state and federal bills have been introduced that address geo-location data collection and tracking. This is a topic that resonates with consumers and has prompted Congressional hearings. Some of these bills would require opt-in consent before collecting, using or sharing geo-location data and would prohibit the collection of such information from children.
5. Exclude kids under 13 or comply with special regulations for marketing to kids.
The key issues here are safety and privacy. Parents are concerned about programs that advertise where their kids are at any given moment, so think through a program that lets a mobile phone user publicize where he or she is. You also need to pay particular attention if any information is collected from children. The Federal Trade Commission recently proposed revisions to its COPPA (Children’s Online Privacy Protection Act) Rule that would expand the Rule to include mobile devices. This means some mobile applications would need to comply with COPPA’s requirements, including obtaining prior, verifiable parental consent.
6. Make sure your privacy policies properly address this kind of activity.
If you launch geo-location promotions or create a special in-venue mobile website, you may need to revise your existing privacy policy to address collection of geo-location information and/or create a privacy policy just for the mobile site. The FTC continues to be very active in monitoring privacy practices and has announced settlements with several companies that failed to comply with their own privacy policies, failed to provide adequate security for consumer information, and failed to honor opt-out requests.
7. Understand how your social media partners like Facebook can impact your program.
Many programs reference or are integrated with a social media platform, such as Facebook or Twitter. Social media platforms have their own terms of use, privacy policies, and promotions and advertising guidelines. And tying into a social media platform may result in the dissemination of information that some consumers think should be private. A class action lawsuit was filed against music sharing site Pandora alleging privacy violations when it partnered with Facebook; the plaintiffs claimed the disclosure of members’ music listening logs violated a state law restricting the disclosure of rental histories.
8. Comply with laws governing the sale and consumption of alcohol.
Most venues serve alcohol so if you provide mobile coupons for concourse concessions consider including language limiting such coupons to those 18 (or 21) or older and reserving the right to reject mobile coupons from fans who appear intoxicated or underage.
9. Make sure all disclosures can be read on a mobile device.
Disclosures – such as age limits, material terms and conditions, text message fees, and expiration dates – should be clear and conspicuous, which may pose challenges when some fans will be reading them on a mobile device.
10. Be prepared for litigation.Geo-location offers and mobile apps are still relatively new.
Laws that regulate these programs are still evolving, as are consumer expectations when using or participating in these types of programs. Plaintiffs lawyers and state and federal regulators are scrutinizing these programs, especially those that involve the collection, whether intentional or inadvertent, of personal information. Conduct due diligence, document the development of these programs, and consider who may be liable when contracting with agencies, vendors and mobile app developers.
