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Pandora’s SEC filing and related reporting spill some interesting beans on what is arguably the most decisive regulatory issue that touches mobile app developers – in other words, the privacy and the security of collected user data.

All this reminds me of LinkedIn’s founder’s recent comments that the Web 3.0 (in case we experienced a sudden dearth of internet buzzwords) will be defined namely by data. User data basically are the raw materials of applications such as Pandora and LinkedIn, and data mining tools are then the way for such companies to turn those raw materials into something productive. Some degree of data tracking and analyzing should therefore be allowed if such services are to make profit and innovate further.

Yet this is by no means to endorse a frontier mentality over privacy and security. The app developers should come out clean(er) on what type of data they actually collect and pass on to to their third-party partners, and if they do not so voluntarily then the policymakers should step in and introduce relevant regulations.Either way, the impact on the involved business models is likely to be negative. Consumers will share less and opt out more.

As a result the firms that rely on advertising revenue will have to put up with varyingly sizeable groups of “don’t-track” freeloader users who may enjoy the benefits of a full service but do not disclose any of the data that make it possible. But that’s something the mobile/internet/e-commerce industry will have to learn to live with, and they surely will. Manufacturing, pharmaceutical, media and very many other sectors haven’t been allowed to operate as they please for decades, and that obviously hasn’t killed them off yet.​

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