While announcing an $800,000 settlement with the popular social-networking startup Path, a top federal regulator warned Friday that Internet companies will face stricter government oversight if they don't take voluntary steps to protect consumer privacy.

"Some companies are doing a good job," said Jon Leibowitz, who is stepping down this month as chairman of the Federal Trade Commission. But he added, "if other companies don't wake up and do the right thing, my sense is the industry is more likely to face far more proscriptive legislation down the road."


Path, started by tech entrepreneur and early Facebook employee Dave Morin, was embroiled in a controversy last year after it was learned the company's signature app had collected information from users' mobile device address books without their consent.


As part of the case, the FTC also alleged that San Francisco-based Path collected personal information from about 3,000 users who were younger than 13, without their parents' consent. Federal regulators said that was a violation of the Children's Online Privacy Protection Act, which provided the authority for the $800,000 settlement.

Morin has previously apologized for the episode and Path said it purged the data it had collected, although Morin also said collecting such information had been a common industry practice. In a corporate blog post Friday, Path appeared to downplay the FTC's action. "The gist of the FTC's complaint is this: early in Path's history, children under the age of 13 were able to sign up for accounts. A very small number of affected accounts have since been closed by Path," the company said in its unsigned post.


Leibowitz declined to comment Friday when asked about the company's characterization of the case. But he noted that the FTC believed Path had deceived consumers by letting them believe the app would not collect information from their electronic address books unless the users agreed to let the app use that information to add their friends to the service.




In recent years the FTC has also negotiated legal settlements of privacy complaints against Facebook and Google (GOOG). Leibowitz said Friday that the Path settlement shows "that no matter what new technologies emerge, the agency will continue to safeguard the privacy of Americans."

The FTC also released a report on data privacy Friday that includes recommendations for mobile app developers and companies that distribute mobile apps. The FTC recommendations include notifying users before they take actions that will let apps use their personal information, and providing a "do not track" option that would let smartphone uses opt out of tracking by advertising networks.



