Developers worried about new rules for phone apps

The software industry is bracing for new regulations that it says will stifle creativity and saddle small businesses with legal and technical costs to ensure their cellphone apps don't run afoul of the rules. The changes, which the Federal Trade Commission is expected to approve this week, would update a 14-year-old law prohibiting the collection of personal information from preteens. It raises these questions: What is the value of a child's privacy on the Internet, and who should pay for it?

Businesses said they fear that under the trade commission's proposal, routine transfers of data that pose no threat to a child's safety will be treated the same as the improper gathering of information that can be used to create detailed user profiles that are highly valued by advertisers. Responsible software developers will err on the side of caution and the result will be less kid-friendly content available on the Internet, they said. The FTC's chairman, Jon Leibowitz, defended the government's approach. "When you are talking about children, you have to give the benefit of the doubt to privacy," he said.