Grand Jury Subpoena Could Mean Trouble for Smartphone App Makers

Lora Bentley
Slide Show

More Smartphones that Work for Business

Streaming radio service provider Pandora has been subpoenaed to testify before a federal grand jury. Pandora is not a primary target, but prosecutors are looking into the data sharing practices of third-party applications developed for Google's Android platform and Apple's iOS.


According to, the subpoena was reported in updates to a Securities and Exchange Commission filing the company made in preparation for an initial public offering. In a statement, the company said:


... We believe that similar subpoenas were issued on an industry-wide basis to the publishers of numerous other smartphone applications.

Pandora also voiced concern that several of the privacy protections proposed of late would severely limit its ability to provide personalized music streams to its users or targeted advertising opportunities to its customers. In short, the story says, the restrictions could put quite a damper on the business.


Slide Show

Top 10 Privacy Issues for 2011

Social media and location-based technologies top the list of concerns.

As for the specifics of the investigation, The Wall Street Journal reports prosecutors are looking at whether app makers "fully described" the information they collect from users, as well as why they need it. Using the information without proper notice and consent violates the Computer Fraud and Abuse Act, the story says.


If charges result from the probe, they could apply to several different companies. George Washington University Law Professor Orin S. Kerr told the WSJ:

This is a big hammer if the government chooses to use it.

More often than not, though, criminal charges against corporations often result in agreements with the government under which the companies will agree to fines and restrictions to avoid the charges.

Add Comment      Leave a comment on this blog post

Post a comment





(Maximum characters: 1200). You have 1200 characters left.




Subscribe to our Newsletters

Sign up now and get the best business technology insights direct to your inbox.