Legal Requirements for Mobile App Business

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Legal Requirements for Mobile App Business

Creating an app requires just the right balance of technical know-how and creative vision. It’s a unique set of skills that some would-be designers possess, and others simply don’t. But simply creating an app is just the first step in the process. Successfully launching the app calls for a completely different set of skills, including the ability to maneuver a complex regulatory landscape.

Indeed, monetizing an app will require you to think about things like taxes, legal structure (e.g., forming an LLC in California to handle your app’s legal side), and more. A good starting point is simply to learn more about the types of legal requirements that app developers face.

Laws That Affect Mobile App Businesses

Here’s a rundown of some of the laws and regulations most salient to mobile app companies.

GDPR

A lot of the laws and regulations governing apps are based on online privacy concerns. Simply put, today’s consumers are increasingly concerned about if, when, and how their personal information is collected and used. Many countries and municipalities have created laws to reflect this mounting concern.

The GDPR is one of the most notable of these laws, and applies to any app that’s available in the EU, as well as in the UK, Switzerland, Iceland, Norway, and Lichtenstein. Basically, the law mandates that you create a clear privacy policy, letting consumers know exactly when and how your app harvests their personal information.

California Consumer Privacy Act (CCPA)

This is another law that concerns the use of personally identifiable information, and it’s enforceable for any business that sells goods or services in California. Again, the requirement is to provide your consumers with clarity, specifically by offering a cookies policy to denote how your app collects data, how it stores that data, and if/when it provides that data to third parties.

Children’s Online Privacy Protection Act (COPPA)

If your app collects personal information from children in the US, defined here as under the age of 13, then you need to comply with COPPA, as well. Basically, this law simply requires your app to seek parental consent before any interactions with children that might result in them furnishing personal information.

The EU Cookie Law

Sometimes called the EU Cookie Directive, this regulation requires any app that’s available in the EU to have a cookie policy, and to obtain consent from any user before retrieving or storing any of their personal information on a device such as smartphone, laptop, or tablet.

This law exists to inform EU consumers of their privacy rights, and to provide them with some level of agency over how their data is collected, stored, and used. Note that, if you have an app that doesn’t use cookies, this law doesn’t apply to you.

Eraser Button Law

Do you have an app that allows users under the age of 18 to register an account in order to post information? If so, compliance with this California law may be in order, mandating that you provide an option for these minors to remove/erase their posts at any time.

Americans with Disabilities Act (ADA)

Finally, the ADA applies to any mobile app companies that have 15 employees or more, requiring them to make their apps accessible even to those who have disabilities. Specifically, app companies will want to be mindful of users who may have auditory or visual impairments.

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Other Legal Issues for Mobile App Developers to Consider

These laws mostly hinge on issues of privacy, confidentiality, and the use of cookies. Doubtless, these are three of the most important regulatory issues for app businesses to keep in mind, yet there are a few other legal concerns to keep top-of-mind.

Intellectual Property

Naturally, creating an app entails the development of original content, source code, an app name, and more. These elements may all be considered intellectual property (IP), and are thus eligible for legal protection through copyrights, trademarks, and patents. 

Jurisdiction

As the laws listed above all demonstrate, compliance can vary quite a bit from state to state and from country to country; for instance, GDPR compliance is probably a good idea for all app businesses, but it’s only a requirement for those in the EU and a few other countries. When launching any new app, or venturing into a new marketplace, checking local laws and statutes is critical.

Legal Structure

When launching any kind of new business, including an app business, it’s imperative to select the right legal structure. Many app companies choose the LLC (limited liability company) format because it offers personal liability protections. Specifically, any lawsuit brought against the company is prevented from seizing any of your personal assets, like a family bank account, house, or car. Some app companies may wish to be established as Corporations, though this is mostly for enterprise-level developers.

App Store Regulations

You’ll probably want to distribute your app via popular platforms like the Google and Apple app stores. Each app store has its own unique set of terms and conditions, and it’s important to review them thoroughly before finalizing any agreement for your app.

Consumer Documents

As noted, it’s usually a good idea to provide a privacy policy for customers and clients; this is one of the most effective ways to stay on the right side of the law. Terms of Use can also be an important way to manage any risks inherent to your customer relationships.

Understanding the Legal Implications of Your Mobile App Business

Creating an app can be an incredible outlet for your technical and creative skill. Turning it into a business, however, requires an additional type of savvy: Good legal sense, and an awareness of key regulatory issues. Make sure you know what’s required of you as you seek to maintain full compliance for your mobile app company.

Amanda E. Clark
WRITEN BY

Amanda E. Clark

Amanda E. Clark is a contributing writer to LLC University. She is a graduate of Eastern Michigan University and holds degrees in Journalism, Political Science, and English. She became a professional writer in 2008 and has led marketing and advertising initiatives for several Fortune 500 companies. She has appeared as a subject matter expert on panels about content and social media marketing. She regularly leads seminars and training sessions on trends and tactics in professional writing.

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