By Lesley Fair

Schoolchildren still hear the story of Alexander Graham Bell’s fateful message, “Mr. Watson, come here.  I need you.”  These days, however, the telephone pioneer would be too busy surfing the Internet, downloading ringtones, sending text messages, taking snapshots, watching videos, and transacting business on the other side of the globe to call out to his colleague.

Once associated only with voice telephone service, wireless devices have become launching pads for innovative products and technologies.  Savvy entrepreneurs are paying particular attention to how this evolving marketplace can connect companies with potential customers.  But just as the development of e-commerce posed consumer protection challenges in the last decade, the advent of “m-commerce” presents a similar situation for direct retailers and law enforcers.  

The Federal Trade Commission (FTC) issued a staff report, Beyond Voice: Mapping the Mobile Marketplace, to explore the consumer protection implications of m-commerce – including the use of mobile messaging services for advertising, consumers’ ability to control mobile applications, m-commerce issues related to kids and teens, best practices for preventing fraud, and evolving security concerns.  Businesses considering a foray into m-commerce should remember that well-settled consumer protection principles apply regardless of the method they use to communicate with customers.  Here are some tips on migrating to the mobile marketplace:

• Take care in describing new technology.   One important lesson from 15 years of FTC Internet enforcement is the challenge advertisers face in introducing new products and services to potential customers.  Avoid jargon and explain material terms and conditions carefully.
• Full disclosure.  If the disclosure of information is necessary to prevent an ad from being deceptive, FTC law mandates that it must be clear and conspicuous.  Illegible superscripts and “mousetype” footnotes won’t do the trick, especially on the small screen of a handheld device.
• Agree on fees.  Everyone likes surprises—but not when the monthly bill arrives.  When disclosing costs and fees, the same clear and conspicuous standards apply.  Never bill consumers for products or services without their clear authorization.
• The bid for kids.  Youngsters make up a growing market for mobile services.  Given the special considerations that apply to advertising that may target teens and tweens, companies should be particularly careful to avoid deceptive or unfair practices.  
• Protecting personal information.  The mobile marketplace presents possibilities—and potential privacy pitfalls.  Honor your privacy promises, implement sound data security practices, and play a pro-active role in educating consumers about how to protect themselves when using wireless devices.

Lesley Fair is an attorney in the FTC’s Bureau of Consumer Protection.