App Regulation on the Horizon too?

Apps - Application Software Icons in Shopping CartAs regulators struggle to make sense of the new app-enabled economy,  a new report has been published today that examines the attitudes, behaviours and experiences of app (application) users and the app environment.

Like a similar report published this week by Ofcom on Second Screen, the report sets tone for a potential future regulatory agenda in a year when serious debates will get underway on PSB prominence, media plurality and the Audiovisual Media Services Directive following last autumn´s Green Paper on Audiovisual Media Convergence.

The Apps Environment Research Report, commissioned by Ofcom and carried out by Kantar Media, is a  qualitative study that was conducted via guided discussion groups. Interestingly it shows that app users perceive the apps environment as a safer, more contained space than browser-based internet access.

The report reveals that the majority of app users assume that official app stores (e.g. Apple App Store, Google Play) have an active role in monitoring content published in their marketplace. There was an almost universal trust that apps downloaded from official app stores provide a safe, secure, and reliable user experience.

Trust in well-known brands led to a willingness to accept permission requests in those apps, despite users not examining those requests in any depth. The study also explored user awareness and attitudes toward app-specific issues, such as permissions requested by apps to access certain device features, as well as in-app purchasing and in-app advertising.

In assessing the differences between apps and browsers some participants overlooked the fact that many apps involve online connectivity. This meant that many app users did not take security precautions as they were simply unaware that they might be required. Some of the less technology savvy participants also did not realise that some apps appeared to be built-in features of the device itself versus being a pre-installed app providing an online gateway to content. Some assumed that physically locking their device was on par with ‘locking’ the app content as well, not realising that an app may be still running in the background while connected to the internet, or that several apps could be running concurrently.

The main findings showed that very few participants raised spontaneous concerns about apps. Of greatest concern to parents was in-app purchasing and in-app advertising features, which were considered frustrating and annoying to others. When not flagged upfront, in-app purchasing features were considered to be dishonest on the part of the app developer.

News plurality and discoverability are also addressed in this report. The findings suggest that news apps have increased the range of news sources that people consult (eg, Twitter) and that overall these apps complement other news sources, such as television, newspapers, and ´browser-based´ internet content.

The report also summarises the various parental control features and grading systems offered by the major app stores. It also examines the strategies employed by parents to control their childrens´ use of apps, with a  consensus emerging that age ratings should be consistent across the different operationg systems (OSs).

A deep examination of the wide range of different application types (genres) that are available in app stores was beyond the scope of this study. In the US, however, problematic apps are on the radar for school administrators, with a number of them, such as Yik Yak (rated 17+ in the Itunes store) causing havoc for school-age kids. The reality is that parents infrequently set-up their parental controls and even when they are, very often the kids know how to disable them. Others apps currently causing concern are Snapchat, Kik, Whisper and Tinder. There´s also this list of the eight worst apps for kids.

One of the conclusions of the report was that a general consensus had emerged among participants that the app environment should be ´collectively regulated´, with the expectation that official app stores play a role in the regulation of the apps that they make available for sale, particularly in terms of quality. “Most parents were strong advocates for a parental role in supervising the app use of children. The majority of app users saw this self-regulation as forming part of a broader collective model of app regulation, involving individual users and parents, alongside app developers and app stores.¨

It is obvious that regulators are trying to get to grips with many different aspects of the new ´app-enabled economy´ and a pace of technological change that just won´t let up. Second screen apps, on-demand ¨TV-like¨ services, peer-to-peer-commerce, and gaming are all on the agenda this year. In February, the European Commission invited Apple, Google and others in the tech industry for a discussion on hidden costs within free gaming apps (see related story).

During 2014, discussion will begin in earnest in trying to make sense of the 250 or so responses to the EC´s Green Paper on Audiovisual Media Convergence during this year of European elections. This will be a key topic for the newly formed European Regulators Group for Audiovisual Media Services (ERGA) which has just completed its first meeting. A forthcoming EuroReg conference in Zurich, scheduled for the end of this month, will also examine connected TV regulation. And shortly, in the UK, a DCMS consultation on PSB prominence in Electronic Programme Guides (EPGs) is due to follow these two latest pieces of Ofcom research. All this is just the tip of the iceberg in terms of what regulators are trying to grapple with.

In an excellent article on the peer-to-peer economy which looks principally at services like AirBnB, but which has interesting ramifications for the discussion at hand here, Arun Sundararajan, professor and NEC Faculty Fellow at the Stern School of Business at New York University,  says “the emerging peer-to-peer, collaborative “sharing economy” will be a significant segment of the country’s future economic activity, stimulating new consumption, raising productivity and catalyzing individual innovation and entrepreneurship. There’s a real danger that today’s misalignment between newer peer-to-peer business models and older regulations will impede economic growth. The solution is to delegate more regulatory responsibility to the marketplaces and platforms while preserving some government oversight, by creating new self-regulatory organizations like those that have succeeded in other markets and industries.

¨If this gap – between the old regulations and the new models – isn’t closed soon, there is a real risk that the impending economic growth could be stifled. Moreover, a lack of genuine regulatory oversight and guidance where actually necessary can lead to backlash that might damage both the platforms and their millions of suppliers.¨

Let´s hope that 2014 will be the year that more thought leaders – especially those commercial players active in the audiovisual media and technology  landscape – will weigh-in on these interesting issues of how digital technologies are indeed transforming business and society, and what the sensible regulatory framework for consumer and child protection could be for dealing with all of it.