WASHINGTON — A popular social-networking application company has reached a settlement with federal regulators over allegations that it collected address book information from users' mobile phones without their knowledge or consent, the Federal Trade Commission announced Friday.
The company that operates the app, San Francisco-based Path Inc., agreed to implement a comprehensive privacy program and to submit to independent privacy audits for 20 years. Path also will pay a fine of $800,000 over accusations that it collected personal information from about 3,000 children younger than 13 without parental consent, a violation of the Children's Online Privacy Protection Act.
FTC officials said the case should serve as a warning to other mobile companies.
"If other companies don't wake up and do better, my sense is the industry is much more likely to face regulation down the road," FTC Chairman Jon Leibowitz said in a conference call Friday.
"Tell your customers what you're doing with their data, don't mislead them, and then once you have that data, don't misuse it," said Leibowitz, who's stepping down from his post this month.
Path is a so-called "digital journal" that allows users to share their locations, photos, thoughts and music with a network of up to 150 friends through their smartphones.
In its complaint, the FTC accuses Path of deceiving consumers by leading them to believe that their personal information would be collected only if they clicked on a "find friends from your contacts" option.
In fact, Path automatically downloaded address books from users' mobile devices without their permission and without notifying them, according to the FTC's complaint. The information included first and last names, addresses, email addresses, dates of birth, and user names for Facebook and Twitter, the complaint said.
The complaint also alleged that Path Inc. had violated the law by failing to notify parents and obtain their consent before collecting children's personal data and allowing the kids to post their precise locations, photos and other private information online.