Developers worried about new rules for phone apps

“I can’t speak for other developers, but I think there are a lot of people out there who would say: `You know what, that’s OK. I’m just going to fold up shop,’” Russell said.

Under the proposed changes, permission from the parent of a preteen must be verifiable. Russell said that requirement alone could pose a major hurdle. What will qualify as proof that the consent is legitimate? A driver’s license number? A form that is signed and faxed by a parent?

“Nobody uses a fax machine anymore,” Russell said. “Verification is a wonderful thing. But to date there just hasn’t been a good way to do so.”

The need to balance the impact of regulations against their value to the public has long caused conflict between the private sector and policymakers in Washington. The topic of this debate, kids’ privacy, has forced app developers and industry representatives to walk a fine line to avoid being seen as insensitive to an issue parents care deeply about.

The FTC has estimated that 500 existing operators of websites and online services and 125 newly formed businesses would be covered by the rule changes. The overall expense for legal and technical fees to meet the new requirements will be $2.7 million, the agency said. That works out to $9,420 for a new business, and just over $3,000 for an existing one, according to the agency’s figures.

But costs for new and existing operators will probably be the same, said the Association for Competitive Technology’s Reed. Building the required privacy standards into an app already in the market is usually more expensive that adding those features from the start, he said.

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