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AGs Weave Themselves Into Patchwork of Digital-Health Regs

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Authors: Barry H. Boise, Sharon R. Klein and Michael D. Vives

AGs Weave Themselves Into Patchwork of Digital-Health Regs

State attorneys general enjoy broad authority to protect consumers and are likely to wield it in the mobile health space based on the convergence of two key issues — patient safety and data privacy.

This article was published in the Consumer Protection, Health, Privacy and Technology sections of Law360 on April 13, 2017. © Copyright 2017, Portfolio Media, Inc., publisher of Law360. It is republished here with permission.

There are more than 165,000 mobile health applications available for download in Apple’s App Store or Google Play. This number will likely keep rising, and a body of federal and state regulators, including state attorneys general, have taken notice.

Recent settlements reached between three health app developers and New York Attorney General Eric Schneiderman underscore the intense regulatory interest in the digital health arena. They also add to the growing concerns health app developers should consider when developing products. Despite a crowded regulatory field, all regulators have identified common priorities — making sure that consumer-facing claims about health apps are supported by evidence and that reasonable steps are taken to product consumers’ personal information from unapproved disclosure. Addressing these considerations is an integral step when developing and promoting a health app.

Navigating a Crowded Web of Regulators

Several federal regulators are scrutinizing mobile health apps. The Federal Trade Commission seeks to ensure that (1) all marketing claims made by app developers are truthful and supported by competent and reliable evidence and (2) protected health information is safeguarded.1 In addition, when the Health Insurance Portability and Accountability Act and the Health Information Technology for Economic and Clinical Health apply, the Office of Civil Rights has an enforcement interest, as do state attorneys general.2

When the intended use of an app places it within the U.S. Food and Drug Administration’s regulatory framework, a host of other regulations apply.3 In addition to the steps needed to obtain FDA clearance, FDA requests that manufacturers take steps to mitigate cybersecurity risks in all aspects of product development, from conception through commercialization.4 To provide some clarity, the FDA, FTC and OCR jointly published an interactive tool to help developers assess which regulations or regulators are implicated by a proposed mobile health app.5

With the recent change in administration and potential curtailment of federal enforcement, the FDA’s, FTC’s and OCR’s continued involvement in this space is unclear. However, this may portend a shift of regulatory enforcement to the states.6

State Attorneys General Enter the Fray

The multilayered web of federal regulators and interests only tells part of the story. As evidenced by three recent enforcement actions, there are at least 50 other regulators who can enforce health claims and privacy interests — state attorneys general. Each state has broad consumer protection laws modeled off Section 5 of the FTC Act. Although these statutes use varying language, they generally give state attorneys general wide latitude to prosecute companies for conduct that is “capable of misleading” or “unfair” or that violates “public policy.” These malleable statutes allow for injunctive relief, restitution, civil penalties or disgorgement and do not require proof of harm or injury to collect penalties.

State attorneys general also have intense interest in protecting consumers from data breaches. Forty-eight states have enacted data breach notification laws. All breach notification laws require prompt notification of breach to consumers, and most require companies to adopt reasonable data security and privacy practices.7 Much like FTC actions, investigations under these state laws typically focus on whether companies took “reasonable steps” to protect customer data before the breach and whether customers were timely notified of the breach. Failing to comply with these laws can result in additional liability and civil penalties.

State attorneys general have launched investigations into national and local companies and have sought to protect their enforcement powers from preemption. In July 2015, a group of 47 state AGs sent a letter to Congress explaining that, because of the harm imposed by an ever-increasing number of data breaches on the local and national level, a proposed national law on data breach notification and data security should not prevent state AGs from bringing data breach enforcement actions.8

New York Enforcement Actions

Operating within this framework, New York Attorney General Eric Schneiderman recently announced settlements with three health app developers for “misleading claims and irresponsible privacy practices” that violated New York’s consumer protection laws.9 The settlements were announced after a “year-long investigation of mobile health applications” and required the companies to amend their marketing claims, modify their privacy policies, consent to monitoring to ensure compliance with the settlement, and pay fines ranging from $5,000 to $20,000. The settlements were related to the following products:

  • "My Baby’s Beat" — baby heart monitor app developed by Matis Ltd. This app claimed that it allowed a pregnant user to listen to and monitor her fetus’s heartbeat by holding her smartphone to her stomach with the app open.
  • "Cardiio" — heart rate monitor developed by Cardiio Inc. This app claimed to allow consumers to track their heart rate after exercise by placing their index finger against the back camera lens and flashlight of their smartphones.
  • "Heart Rate Monitor & Pulse Tracker" — developed by Runtastic GmbH. This app claimed to allow consumers to track their heart rate after exercise by placing their index finger against the back camera lens and flashlight of their smartphones.

Unsubstantiated Marketing Claims Are Likely to Be Deceptive

These settlements provide insight on the types of health apps and marketing claims that are likely to trigger regulatory scrutiny. All of these apps were referred to as “health measurement apps” — a term not used by other regulators — because they purported to measure vital signs, like a traditional medical device, without the assistance of any external device. Moreover, each of the app developers made marketing claims comparing their apps to traditional medical devices, even though the apps were never submitted to the FDA.

AG Schneiderman said these claims were deceptive because the developers said their apps performed the same functions as regulated medical devices, but they did not conduct proper testing to back up those claims. And, in some instances, they did not compare the functionalities and performance of their apps to the devices they claimed to emulate.

Health app developers should learn from this example. They should ensure that any claims they make are fully supported by data, and, if their app has not been submitted to the FDA, refrain from making any direct comparisons to FDA-regulated devices.

In these cases, the settlements required each developer to clearly and prominently disclose that its app was not a medical device, was not intended to serve as a replacement for an FDA-regulated medical device, and was not reviewed or cleared by the FDA. The settlements required disclosures to be made in several places: in the app store for review before purchase, on the developers’ websites, and as part of a “pop-up message that must be viewed by users of the app.” As a result, any health app that has not been submitted to the FDA should alert consumers to this fact.

Privacy Policies Must Be Robust and Explicit

The settlements also noted that the apps’ privacy policies contained several inadequate or insufficient disclosures that amounted to deceptive acts. Some of the problematic conduct included:

  • Disclosing that the company was providing third parties with aggregated data from all of its users, but failing to disclose that third parties could potentially use that data to “reidentify data about specific users.”
  • Not requiring consumers to affirmatively consent to the privacy policy and instead presuming consent through use of the product.
  • Stating in the privacy policy that a GPS location feature could be turned off, but failing to provide that option within the app itself.
  • Collecting GPS location data without disclosing this practice in the privacy policy and not receiving consent from customers to collect this information.

As a result, the app developers were required to amend their privacy policies to provide greater, and more explicit, disclosures and to obtain opt-in consent from consumers. The New York AG’s concerns demonstrate the serious and thorough approach regulators are taking with respect to data privacy and security in an increasingly interconnected and digitized world.

Regulatory Scrutiny Is Likely to Intensify

In announcing the settlements, Attorney General Schneiderman noted the benefit of health apps, but predicted continued oversight in this area:

Mobile health apps can benefit consumers if they function as advertised, do not make misleading claims, and protect sensitive user information. However, my office will not hesitate to take action against developers that disseminate unfounded information that is both deceptive and potentially harmful to everyday consumers.

These comments and recent enforcement actions highlight that state AGs enjoy broad authority to protect consumers and are likely to wield it in the mobile health space based on the convergence of two key issues — patient safety and data privacy. With an ever-growing number of consumers turning to mobile apps to help manage their health, app developers should expect that regulatory scrutiny will only continue to increase in the future.


1 On February 23, 2015, FTC announced settlements with two mobile app developers, available at https://www.ftc.gov/news-events/press-releases/2015/02/ftc-cracks-down-marketers-melanoma-detection-apps. In April 2013, FTC issued guidance on best practices when marketing a mobile app, available at https://www.ftc.gov/tips-advice/business-center/guidance/marketing-your-mobile-app-get-it-right-start. In April 2016, FTC issued guidance on best practices for mobile health app developers, available at https://www.ftc.gov/tips-advice/business-center/guidance/mobile-health-app-developers-ftc-best-practices.

2 OCR has created a platform for mobile health developers that identifies whether HIPAA applies, presents different factual scenarios and allows developers to ask questions about the applicability of HIPAA, available at http://hipaaqsportal.hhs.gov/.

3 On February 9, 2015, FDA issued final guidance addressing mobile medical applications, available at http://www.fda.gov/downloads/MedicalDevices/.../UCM263366.pdf.

4 On October 2, 2014, FDA issued final guidance addressing premarket cybersecurity controls, available at http://www.fda.gov/downloads/medicaldevices/deviceregulationandguidance/
. On December 28, 2016, FDA issued final guidance addressing postmarket management of cybersecurity in medical devices, available at http://www.fda.gov/downloads/medicaldevices/deviceregulationandguidance/

5 See FTC, Mobile Health Apps Interactive Tool (Apr. 4, 2016), https://www.ftc.gov/tips-advice/business-center/guidance/mobile-health-apps-interactive-tool.

6 For example, the nominee to lead FDA, Dr. Scott Gottlieb, has publicly argued that innovative new products, like mobile health apps, should not be subject to FDA regulation. See Scott Gottlieb & J.D. Kleinke, There’s a Medical App for That—Or Not, The Wall Street Journal (May 29, 2012), available at https://www.wsj.com/articles/SB10001424052702303674004577432742562311810.

7 Alabama and South Dakota are the only states without breach notification laws.

8 For a copy of the July 7, 2015 letter from the National Association of Attorneys General to the Congressional leadership, see http://atg.sd.gov/docs/Final%20NAAG%20Data%20Breach%20Sign%20On%20Letter.pdf.

9 For a copy of the March 23, 2017 press release announcing the settlements and the associated settlements, see https://ag.ny.gov/press-release/ag-schneiderman-announces-settlements-three-mobile-health-application-developers.

Barry Boise and Sharon Klein are partners in Pepper Hamilton’s Health Sciences Department, a team of 110 attorneys who collaborate across disciplines to solve complex legal challenges confronting clients throughout the health sciences spectrum. Michael Vives is an associate in the Health Sciences Department.

The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.