The Rise Of The Smartphone: Compliance Challenges

The smartphone market has grown exponentially in size and sophistication over the last few years.  The first App store and the second-generation iPhone – with 3G and multi-function capabilities - were only launched by Apple in 2008, followed soon after by the launch of various competing products - yet a recent survey has found that more than a quarter of consumers in the UK now own a smartphone¹.  There are predictions that in 2011, 50% of computing devices sold globally will not be PCs².

Smartphone users are embracing new ways of accessing content and functionality 'on the move', and suppliers are exploiting new opportunities to generate revenue from apps and content distribution.  However, the size of smartphones, their input methodology and less consistent connectivity present device-specific compliance challenges that the industry has been left to grapple with. 

Legal and technical challenges

Much of the regulation applicable to smartphone use (e.g. relating to online sales, advertising and privacy) was enacted before mobile devices hit the high street.  As a result, the way in which mobile devices are used – and functionality and content can be accessed - has created compliance challenges which would have been difficult for legislators to predict in advance. 

There is a good deal of regulatory guidance on appropriate technical means of achieving compliance with application regulations, but there are gaps.  These gaps have been left to fill by industry guidance and/or by suppliers taking their own pragmatic, risk-based approach to compliance. 

Smartphones are being used to send and receive emails, make purchases, surf the internet and engage in social networking in similar ways that computers are, yet they are not computers. Instead, they fall somewhere between computers and mobile phones on the regulatory spectrum, and suppliers' compliance strategies will need to reflect the device-specific differences.

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¹ This figure rises to 44% in the 18–34 age group: "Anytime, anywhere": KPMG’s third media and entertainment barometer, www.kpmg.com.

² Deloitte has predicted that in 2011, PC sales are likely to reach almost 400 million units, but the combined sales of smartphones, tablets and non-PC netbooks will be well over 400 million. "Smartphones and tablets: more than half of all computers aren’t computers anymore", Deloitte TMT Predictions 2011, www.deloitte.com.

Lawyers Louise Taylor

This article first appeared in E-Commerce Law & Policy and is reproduced with the kind permission of the editors.