Apple sued over apps privacy; Google next?

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Reuters: Two separate groups of iPhone and iPad users have sued Apple Inc alleging that certain software applications were passing personal user information to third-party advertisers without consent.

In the lawsuits seeking class action, filed in a federal court in California, the plaintiffs sought a ban on passing of user information without consent and monetary compensation, according to case documents.

At some point, both cases may be consolidated into one by the judges presiding over the cases, said Majed Nachawati, a partner at law firm Fears & Nachawati, one of the attorneys for the complainants.

Along with Apple, makers of popular apps such as Textplus4, Paper Toss, Weather Channel, Dictionary.com, Talking Tom Cat and Pumpkin Maker were also named co-defendants in the lawsuits filed on December 23.

The lawsuits follow a Dece,ner 18 report in the Wall Street Journal that said smartphones apps may be sharing personal data 'widely and regularly', and that iPhone apps transmitted more data than apps on phones using Google's Android operating system.

"We are also looking at Google's Android platform and a lawsuit against them has not been ruled out," Nachawati said.

Concerns about user privacy have emerged with the rapid growth of smartphones that spawn apps, and social networking websites such as Twitter and Facebook.

The Unique Device ID that Apple assigns to its devices has become an attractive feature for third-party advertisers looking for a way to reliably track mobile device users' online activities, one of the lawsuits said.

"None of the defendants adequately informed plaintiffs of their practices, and none of the defendants obtained plaintiffs' consent to do so," one lawsuit alleged.

NO MAJOR THREAT

In April, Apple amended its developer agreement to ban apps from sending data to third parties except for information directly necessary for the functionality of the apps.

However, the lawsuits allege that Apple has taken no steps to actually implement its revised developer agreement or enforce it in any meaningful way due to criticism from advertising networks.

Apple could not be immediately reached for a comment.

Global Equities Research analyst Trip Chowdhry said the lawsuits would have little impact on investors.

"If this were a major issue, all web browsers would have to shut down and there would not be any advertising on the Internet," Chowdhry said.

Apple shares were up 74 cents at $325.42 in afternoon trade on Tuesday on Nasdaq. They touched an all-time high of $326.66 earlier in the session, as investors were unperturbed by the lawsuits.

ThinkEquity analyst Rajesh Ghai said although there is scope for social media companies to tighten their policies to prevent the leakage of sensitive personal information, he did not expect the current lawsuits to have any impact on Apple in the long term.

Last month, Facebook said some of its applications violated the social networking company's policies against sharing user information and had promised to fix the problem.

Earlier this year, microblogging service Twitter agreed to settle with the U.S. Federal Trade Commission over charges that it put its customers' privacy at risk by failing to safeguard their personal information.

On Dec. 16, the U.S. Commerce Department's Internet Policy Task Force said in a report that the department should have its own privacy office and develop voluntary, enforceable codes of conduct for data companies and advertisers that track people on the Internet.