The popularity of mobile technologies is constantly rising. Mobile Apps development for smartphones, tablets, and other mobile devices has undergone tremendous growth due to the widespread use of these devices.
These software, often known as apps, are widely utilized in various industries, including banking, retail, online news, and airline check-in. These applications give businesses remarkable possibilities and allow them to leverage mobile technology to connect with current and potential consumers while assisting with internal business procedures.
Undoubtedly, the app development market is becoming increasingly appealing, particularly for startups. Several statistics regarding mobile app growth are:
- By 2023, Statista projects that mobile apps will have brought in over $935 billion. The Google Play Store offers 3.48 million+ applications. The Apple App Store offers more than 1.96 million different apps for download.
- More than a few apps have been downloaded; mobile apps account for 69% of all digital media time in the US.
- Daily, 10 apps are used on smartphones, and 30 are used monthly.
- According to research, an app is opened by 49% of users 11+ times daily. 21% of millennials open an app more than 50 times daily.
Although there is constant growth and expansion in the mobile app development world, one thing that cannot be ignored is the ethical and legal issues around the business.
What Are the Ethical Issues of a Mobile App?
1. NDA (Non-Disclosure Agreement) – Protect your mobile product idea
A non-disclosure agreement, or NDA, is a contract in which the parties formally agree to keep specific information private. Such agreements are ALWAYS encouraged to be signed by our clients before beginning any business negotiations. Why?
It is one of the few approaches to safeguard the idea behind your goods. Several individuals may sign NDAs. If the entity with you entered into a contract violates its terms, you can effectively safeguard your rights with a well-drafted confidentiality agreement.
What Aspects to Consider When Signing an NDA?
- An Explicit mention of confidential information.
It is a good idea for the parties to define what they mean by “confidential information” before signing a contract. Most importantly, it should contain all relevant information about your business:
- fiscal information
- know-how,
- show-how,
- operating,
- marketing,
- or exchange info.
Also included in the definition should be details about the Product:
- ideas,
- solutions,
- operating procedures,
- functionalities,
- critical architectural components of the application.
It would also be wise to include a language defining “confidential information” as any information we have shared with the other party regarding commercial negotiations.
- Obligations of the Other Party
State the obligations of the other party. They should, among other things, contain a clause requiring the other party to keep all acquired confidential information confidential and a clause mandating that the other party will only disclose information to its employees when necessary while also requiring those employees to keep the information confidential. - Contractual Penalties
The NDA will lose its value if you include no contractual penalties for any action against confidentiality obligation. You can ask for financial compensation or legal action if the party violates confidentiality obligations.
You can charge them with defamation or revenue loss due to any breach. - Term of Contract
As per the industry standards, you can have your NDA valid for 2, 3, or 5 years. Depending on the course of action and the information shared, the term of your NDA can be decided. - Obligation to Return Information
On the safer side, in case the business negotiations don’t go well, you need to affirm that the other party returns or destroys any confidential information you shared during the discussion.
2. Independent Contractor Agreement
It is worthwhile to consider the agreement as a compass directing us throughout the cooperation, especially when there are uncertainties or disagreements. For this reason, it is a good idea to outline the details of this collaboration in the contract. For example, working in the Agile approach is a trade standard that should be included in the agreement. To sum up:
Describe the Collaboration Process
You will prevent misaligning mutual expectations if you discuss how the partnership will operate throughout the negotiation. Include the tools you’ll use, communication guidelines, and meeting scheduling process in the agreement.
Know Force Maujre
Remember to incorporate the force majeure clause in the contract in light of the developing political or economic occurrences. This clause will allow you to lessen the adverse effects under the agreement if any unfavorable consequences of any uncontrollable circumstances negatively impact you. As with many customary clauses in such agreements, the force majeure clause is typically jointly binding.
Terminating the Partnership
If the collaboration ends sooner than expected, drawing up an exit strategy is advantageous for both parties. If the parties agree, it is also wise to include details regarding the transfer of the current code, payment deadlines, and any contractual fines for unauthorized termination of cooperation.
3. Privacy Policy & Data Protection
One of your essential legal tasks is ensuring that the handling of users’ data is secure. Depending on where your software is distributed, different criteria apply. For instance, for your app to be made available to European users, you must adhere to the GDPR’s legal requirements for apps. Additionally, for users in the USA under the age of 13 to download your app, you must comply with the Children’s Online Privacy Protection Act’s legal requirements.
What your application accomplishes will affect the criteria as well. Specific industries, including the medical sector, have stricter obligations for data privacy (HIPAA).
The safest action is to leave it up to the lawyer involved in the app development process because there are so many laws governing the processing of personal data in applications. From a technical standpoint, data must also be adequately protected. Data leaks are an issue for which you, the product owner, are accountable. It is essential to pick a business that ensures technical data protection.
It is a good idea to properly carry out the requirements of personal processing data to make your application more appealing to data-conscious consumers.
4. The Terms and Conditions
The Terms & Conditions of your application will vary significantly depending on the country where users can access it. For instance, numerous legal statutes in European nations put requirements on the contents of Terms & Conditions, requiring them to have specific text and legal issues. The most recent legislation on internet intermediary services is one example of this (which applies throughout the European Union). Above all else, keep in mind to specify:
The Controller’s Definition
The Terms & Conditions should contain some basic details about your business.
A Service’s Terms of Provision
Specify what your application accomplishes in the Terms & Conditions, the requirements for registration (such as age restrictions) and account deletion, as well as the conclusion and termination dates of the agreement between you and the user. Along with suspending and barring user accounts, it is essential to include any technical prerequisites or guidelines for safe program use.
Handling Grievances and Communication with the Controller
Include the procedures for handling complaints and contact details in the Terms & Conditions. It is best practice to create a detailed complaints process with several steps.
Decreased Liability
You should outline the extent of your responsibility to users in the Terms & Conditions. For a typical user to understand this page, it should be written in straightforward language. Making clauses in the fine print is useless. It won’t boost user confidence and might be against some laws governing the legal requirements for disclosing the terms and conditions of service to app users.
5. Conditions for App Stores
In addition, your mobile app needs to adhere to all criteria for app publishing established by Google and Apple guidelines. These focus on protecting personal data, such as health information and information collected from minors, as well as on concerns relating to the intellectual property of your mobile product.
These are the fundamental ethical issues a mobile app owner has to deal with. No matter what industry you serve and what audience you engage in, these ethical terms are going to stay by you till the end of time.
Use of Open-Source Software
The GNU GPL is used by most open-source software (copyleft license). If your product contains source code covered by the GPL or LGPL (Lesser GPL), your code may be subject to the GNU terms, which require you to distribute the source code as well if you distribute your product.
You can release software under proprietary licenses thanks to several non-copyleft open-source licenses.
The following are the most significant app legal difficulties to consider while creating a mobile application, taking into account all potential pitfalls:
- If your app has access to users’ personal information, include a privacy policy. To determine the minimum age requirements in your nation, consult the General Data Protection Regulation publications.
- Provide the terms and conditions if your app is premium, freemium, or features in-app purchases.
- Using any of the terms of use generators is also not advised.
- Include a Disclaimer to reduce your risk if your app is not functioning correctly or is being misused.
It may appear long and tedious to mention all of the necessary statutory problems. However, since we take care of 90% of these safety measures and requirements, you shouldn’t worry when working with our team. You only need to sit back, let us handle the mobile application development, and consider your project finished.
Which Industries Should Consider App Development Legal Issues?
(1) Healthcare Sector
The healthcare sector deals with sensitive information about people’s lives and health, so it must imply specific regulations. The most significant thing is medical applications should do away with the possibility of human error in diagnosis, treatment planning, health monitoring, etc. Additionally, we would like to highlight the primary medical laws that should be considered when creating medical software.
- Health Insurance Portability and Accountability Act (HIPAA)
- Federal Food, Drug, and Cosmetic Act (FD&C Act)
- Health Breach Notification Rule
- Lanham Act
(2) Financial Services Sector
The utmost level of privacy and security is required for financial data. Today, there is a high demand for online banking apps. Thus, it is essential to consider all legal aspects of mobile app development while creating one to give customers a sense of security and protection.
(3) Education Industry
The educational sector has begun a digital transition to boost educational quality and students’ educational experiences. Various educational organizations create and execute educational platforms that offer the same high-quality learning experience and knowledge assessment as in-person learning does throughout and after courses.
(4) Media and Entertainment Industry
Due to the rise of more recent forms of exploitation made possible by technology, copyright laws and regulations governing media and entertainment are becoming increasingly popular.
This is not simply the prime time for television; it is also the prime time for media law. Along with media and technology, other IP-intensive sectors like fashion and fast-moving consumer goods also present a wealth of opportunities for intellectual property lawyers. The sale of counterfeit goods has long been a problem for the fashion industry, and since the advent of E-commerce, this problem has worsened.
(5) Social Networking Applications
You most likely have in-house compliance experts if you use social media for regulated businesses. Your go-to place to get information about what you can and cannot do on social networks ought to be them.
Your compliance officers hold the most up-to-date knowledge of compliance regulations. Regarding social media tools and tactics, you are up to date. The benefits for your brand can be maximized — and the risks reduced — when the compliance and social media marketing departments collaborate.
- CAN-SPAM (in the United States)
- Canada’s Anti-Spam Legislation
- The California Consumer Privacy Act (CCPA)
- The EU General Data Protection Regulation (GDPR)
- The U.S. Children’s Online Privacy Protection Act (COPPA)
- The Global Cross-Border Privacy Rules (CBPR) Forum
(6) eCommerce Business Sector
You must apply security and safety precautions if you run an e-commerce app to safeguard the personal data of your consumers. You can prevent attackers from accessing your app by reducing the lifespan of access tokens to a few minutes and adding refresh tokens. It will soon expire even if they manage to get the access token. For fresh access tokens, users can also utilize refresh tokens.
- Federal Trade Commission Act (FTC Act)
(7) Food and Restaurant Business
People who want on-demand cuisine at their convenience drive daily growth in the restaurant delivery industry. Comparatively speaking, starting a business in any other industry presents more difficulties than starting a business that delivers food. You can collaborate with nearby eateries eager to deliver meals to consumers, including eateries, cafes, and restaurants. Make careful to adhere to the rules of the law.
- Business license and a business plan
- Certificate of Incorporation
- Tax Identification Number
- Non-Disclosure Agreement (NDA)
- Registration for Commercial Vehicle Operator
- Food and Drink Handlers Certificate
- Health Inspection Certificate
- Proof of ownership for Vehicle and Vehicle license
- Commercial Driver’s License
- Operating Agreement for LLCs
- Online Terms of Use
- Online Privacy Policy Document
- Insurance Policy
Legal Considerations When Developing a Mobile Application
As you focus on mobile app development, you need to consider a few things. A few points that you need to abide by and some points that you developers need to stick to. Here’s a look at the legal considerations of a practical application.
Legal Considerations for App Developers
(1) Jurisdiction
Your program is accessible and can be downloaded in other regions because the app marketplaces are typically global. The issue is whether you can create and establish your application following the legal framework and regulations of a single nation or whether you must alter it to satisfy the requirements of various legal codes. Managing all local rules from several locations is undoubtedly a challenging endeavor.
(2) Incorporate a Business to Limit Your Liability
Think about the kind of business you want to operate before deciding to develop your app idea and design the answer. You can choose whether it should be a limited liability company, a partnership, or a sole proprietorship.
(3) Entity Formation
Creating an LLC before beginning app development is frequently advised. In this manner, app owners could limit their liability if issues occur. While creating an entity is a common step for business owners, if you’re making an app for personal use, it might be optional.
(4) Intellectual Property (IP) Ownership
Protecting one’s copyright and avoiding violating third-party copyright are two factors that should be considered when developing an app.
To safeguard your intellectual property, you can:
- The trademark identifies the origin of products or services. Trademarks protect your app’s name and logo.
- The text, graphics, and source code of the app are all protected by copyright. Once the work is finished, the app is immediately copyright protected. In addition, you can submit a copyright application to the US, EU, or UK Copyright Office to create a public record.
Although registration is necessary to file a lawsuit in federal court, most of the time, one must apply for protection in each nation. Take your time and first develop a profitable app.
(5) Cookie Management
Cookies are a fantastic marketing tool that shows how many people visit a website. However, in light of the legal specifications for software, cookie collection should proceed as planned. The first guideline is always letting visitors know that your website gathers their data under your privacy statement. Users are thus free to choose whether or not they want to share their data.
These are some primary considerations that your developer needs to ensure when working on your mobile application.
Where to Find a Suitable Team of Developers?
Building custom software is a complex process because it necessitates considering various development standards, industry quirks, app legal difficulties, etc. Choosing a development business with experience that offers a transparent project development cycle and documentation is therefore crucial.
Although there are many different software development teams, we would like to highlight the fundamental qualities that every reputable software development business should provide:
A demonstrated track record in your sector; developers with the right tech stack; regular communication, keeping you updated on the development process; easy-to-understand and transparent estimates; a development that stays within your budget; research into your sector before the development process begins; maintenance services.
To Sum It Up
At Octal IT Solution, we have decades of experience creating unique software solutions for clients, digitally modernizing their businesses, and enhancing their overall effectiveness. Our primary guiding principle is complete transparency of all activities throughout the development cycle. If you need a consultation with our team to create an app from scratch for your company or determine whether your current software complies with legal requirements, contact us.
