Sprint's War on App Stores Could Turn into Litigation Nightmare

In the ongoing struggle to make themselves relevant to consumers and developers carriers have launched app and developer initiatives. Verizon is the highest profile of those with its Android apps. But now Sprint is making a move with a "cross platform" initiative that would use the browser rather than a traditional app store to deliver apps to consumers. 

According to a write up in Computerworld the company would offer network location as well as demographic and behavioral data about users and analytics to woo developers, potentially giving the effort superior data and tools vs more "traditional" app stores: 

Sprint is looking at providing data on user activity across both device-resident and Web-based applications, according to McGinnis. It could offer both general statistics about the subscribers that use an app and data on a particular user, he said. The individual subscriber data would only be used if the customer gave explicit consent, and personally identifiable information would be removed, he said.

But that data could give developers the resources to make their Web applications more relevant than those in the established app stores, according to Openwave's Nguyen. The information could include location, Web browsing history and other data. With data about where a particular subscriber has gone on the mobile Web, carriers could use Integra to place that subscriber in a particular demographic segment, Nguyen said. Knowing that demographic segment would help the application provider offer more targeted content or advertising.

Location, analytics and user data is certainly one way to make carriers relevant in the new smartphone world. However there's a privacy nightmare looming here. The online world is currently grappling over myriad privacy controversies and litigation. Unless it was very carefully executed (opt-in) carriers and their partners would find themselves on the receiving end of class action lawsuits.

Though the passage above references "explicit" consumer consent, any scenario in which carriers "watch" their users and provide demographic and behavioral information to third parties (even if anonymous and in the aggregate) will be met with litigation.

The O2 More-Placecast opt-in SMS model is a much cleaner and better approach to reinserting the carrier brand into the consumer experience (and reaches a broader audience as well). Of course it's not mutually exclusive of providing data and location to developers. However too much data is going to be a major legal problem.

Carriers do have some sway over Android and potentially Windows 7 Phones. But this cross-platform app strategy won't work on a device like the iPhone, where the consumer's allegiance is to Apple and the carrier is the incidental provider of bandwidth.