(De)fault lines

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When people get the latest software, app, or gizmo, it comes with default settings configured by the company responsible for the product. The FTC’s settlement with Frostwire, a developer of free peer-to-peer (P2P) file-sharing software, raises interesting issues for industry. When can a company’s choice of default settings amount to an unfair practice under Section 5 of the FTC Act? And when can a company’s representations about default settings be considered deceptive?

P2P software lets users download and share files — photos, documents, music, and the like — with others who have the same software. According to the FTC’s complaint, Frostwire’s Android file-sharing software was likely to cause people to share personal files stored on their phones or tablets without knowing that was going on.

How so? Because once a user clicked through the installation process, the default settings for Frostwire for Android were set to automatically share photos, videos, and other files stored on the device. The default settings also would publicly share new files in “shared” categories. That could include, for instance, documents business executives moved to their tablet or new photos or videos taken with a smartphone. According to the FTC’s complaint, that was an unfair practice, in violation of Section 5.

What about Frostwire’s desktop application? The default settings for that product also were set to automatically allow files to be shared publicly. The application represented that files users downloaded from a P2P network wouldn’t be shared, but — according to the FTC — they were. The FTC alleged those claims were false and deceptive in light of representations the company made. (Check the complaint for screenshots that illustrate the FTC’s charges.)

Among other things, the settlement bars Frostwire from using default settings that share users’ files and requires the company to provide free upgrades to correct the unintended sharing.

What points should businesses take from this settlement?

Determining defaults. If you design or market software or apps, spend some time thinking through your default settings: Do your defaults keep users safe from making serious inadvertent errors? Does your application work in ways consumers would reasonably expect? Make sure that disclosures about important aspects of what your software will do are correct and complete. As the Frostwire settlement demonstrates, some choices you make could amount to unfair or deceptive practices.

“But it’s free!” The fact that software or apps may be free doesn’t remove important consumer protections from the picture. Savvy marketers understand the importance of compliance regardless of the business model.

Downloading on the down low. Even if software’s not your game, it’s not unusual for employees to download P2P programs on the office network, or on home computers and mobile devices they use for work. Read Peer-to-Peer File Sharing: A Guide for Business for more on establishing company policies about P2P. Include a segment on the risks of P2P in your in-house security training. The redesigned On Guard Online site explains the risks in non-techy language suitable for staff meetings.

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