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Mobile app firm Snapchat settles FTC charges

BusinessPembroke PinesApple iOSNew Year's Day
Snapchat will be required to implement a privacy program that will be monitored for the next 20 years
Via @latimes: Snapchat messages didn't disappear after being viewed — they could be stored.

Oh, snap. They don't always disappear.

Snapchat, a mobile messaging app, has been hugely popular among teens and young adults, who have flocked to the service for its purported ability to make their photo messages, or "snaps," vanish a few seconds after they're viewed.

But on Thursday, the Venice start-up settled charges that it deceived users about its central feature — ephemeral messages — and failed to secure users' personal information.

According to the Federal Trade Commission, Snapchat made "multiple misrepresentations" to consumers about the app "that stood in stark contrast to how the app actually worked."

Under the settlement, Snapchat will be required to implement a privacy program that will be monitored by an independent expert for the next 20 years. The company will also be prohibited from misrepresenting the privacy and security of its app as well as the confidentiality of its users' information.

"If there's one message we want to make sure is clear today, it's if you make

promises about privacy, you must honor those promises," said Chris Olsen, assistant director of the FTC's division of privacy and identity protection. "Otherwise you risk FTC enforcement action."

Snapchat, which says users send more than 700 million snaps a day, published a contrite blog post Thursday admitting it had made mistakes during its early days but had learned from them. Among those errors was how it communicated with users, the company said.

The start-up noted that even before Thursday's agreement, it had already addressed and fixed many of the issues in the FTC's complaint by improving the wording of its privacy policy, app description and notifications. The company — which reportedly turned down multibillion-dollar offers from Facebook Inc. and Google Inc. last year — also promised to continue investing in the security of its service.

"We are devoted to promoting user privacy and giving Snapchatters control over how and with whom they communicate," Snapchat said in its post. "That's something we've always taken seriously, and always will."

That may not be enough for some of its users.

"If the main feature doesn't work the way they said, then I'm just going to find another way to send pictures," said Justin Stephen, a 19-year-old Snapchat user from Pembroke Pines, Fla., who uses the app four or five times a week to send photos and videos to his friends and girlfriend. "I'm not going to be using that app unless I need to because they've shown that they're a company that can't be trusted as of now."

Stephen said he was surprised to hear about the charges against Snapchat, which had appeared to prioritize privacy more than other tech services he uses.

"Companies always claim, 'Yes, you're safe, and everything is secure,' and then they're taking data without you knowing and saving data without you knowing," he said.

The settlement stems from a complaint filed by the FTC that included numerous charges against Snapchat.

The federal agency said Snapchat told users that messages sent through its app disappeared after being viewed. In reality, users had several ways of storing those messages, including using third-party apps.

Additionally, Snapchat promised to alert users if a recipient of their message took a screen shot; some Apple iOS device owners could use a special technique to screen shot a message without alerting the sender.

The FTC also said that Snapchat was not truthful about what data it collected. On the Android operating system, the app transmitted users' geolocation information, even though Snapchat said in its privacy policy that it did not do so. And on Apple devices, Snapchat collected users' address book information without their permission.

On New Year's Eve, a security breach resulted in the exposure of the user names and phone numbers of 4.6 million Snapchat users. At one point, users also complained that their messages were not being sent to their friends, but instead, to complete strangers. This happened because Snapchat was not verifying users' phone numbers, making it possible for users to sign up with telephone numbers that did not belong to them.

FTC's Olsen said in a call with reporters Thursday that some consumers had raised concerns about the app, but he declined to give specific details about those complaints or about the commission's investigation.

Under the FTC's rules, its settlement with Snapchat will be subject to a public comment period for 30 days, after which it becomes final. Settlements rarely change after the public comment period.

After an order becomes final, each violation may result in a civil penalty of up to $16,000 per violation, per day.

Bob Sullivan, a data and privacy expert in Seattle, said Snapchat's brand wouldn't be severely damaged by the FTC settlement, but worried about the app's future now that its central premise has been called into question.

"Snapchat was only sexy because it convinced kids that they could send pictures of themselves that they frankly wouldn't want anyone to see after a few seconds," he said. "The only reason people use Snapchat is for privacy, and it fundamentally didn't work. And I don't know what Snapchat is going to be if it isn't this."

andrea.chang@latimes.com

salvador.rodriguez@latimes.com

Twitter: @byandreachang, @sal19

Copyright © 2014, Los Angeles Times
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