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The operator of the social networking app Path has agreed to settle FTC charges that it collected personal inforrmation from its users' address books without their consent. Under the terms of the settlement, Path, Inc. will establish a comprehensive privacy program, will obtain independent privacy assessments every other year for the next 20 years, and will pay an $800,000 fine.
"The FTC alleged that the company's app ... collected the personal data of about 3,000 children -- information from their phone address books, including names, addresses, phone numbers, email addresses and dates of birth. ... In addition to allegations about the collection of children's information, the FTC alleged that Path also misrepresented how and what information was obtained from all of its users," writes SC Magazine's Danielle Walker.
"Path's version 2.0 provided users with three options for inviting friends, through their contacts, through Facebook or by inviting them to join Path by email or SMS," writes PCWorld's Grant Gross. "However, Path automatically collected and stored personal information from the user's mobile device address book even if the user had not selected the 'find friends from your contacts' option, the FTC said."
"Path first admitted the practice on February 7, saying it was grabbing users' address books to 'match friends' and would be changing the feature to opt-in," writes The Next Web's Emil Protalinski. "The backlash was massive, and Path released an update the next day, including an apology from Path CEO Dave Morin."
"But the damage had been done, attracting the attention of Congress and the FTC," writes Ars Technica's Chris Foresman. "The FTC launched an investigation into the illicit access of contact data and in the process discovered that Path's sign-up process had allowed children younger than 13 to sign up for accounts without parents' knowledge or consent."
"An $800,000 charge is likely a big blow to the startup," notes CNET News' Shara Tibken. "Path last year raised about $30 million from investors, but the company's business model isn't entirely clear."