The odds are pretty good that if you’re a big consumer of mobile apps, the private information on your phone has been collected and sent somewhere without your knowledge.

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That’s a scary thought for consumers and a tantalizing one for attorneys in the small but growing arena of apps security. San Francisco-based Lookout says in its Apps Genome project report that 1 in 3 free iPhone apps and 3 in 10 free apps on Android access the location of the phone user. The report also says that 14% of iPhone apps extract personal information, as do 8% of Android apps.

Permission may be written into the user agreement, but is it prominent enough? And what assurances do apps makers give that the information will be both protected from hackers and not shared without the user’s permission?

We already have read horror stories about how corporations such as Monster, Second Life and Hell’s Pizza have had their customer databases hacked. While we may feel better that Apple vets its apps, Android apps come from an unrestricted market.

An iPhone has been breached, and so it’s a matter of time before snoopers find their way into the databases of legitimate apps makers and operators. The people who gave permission — and especially the people who did not — may have cause for action. How large could damages be? How well insured or solvent are some apps makers whose software contains flaws? And is there any third-party liability from companies that sell tools for building faulty apps?

Small, inconsequential breaches will likely not produce large damage claims, but could set import precedents for manufacturers, software developers, systems managers and data warehousers. Watch for the full report from Lookout and keep an eye on the dockets.

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We are definitely seeing an increase in criminal activity.

The question is arising in articles such as the ominously headlined article, “Dark Side Arises for Phone Apps”, in the Wall Street Journal on June 4. While Apple and Blackberry vet their apps, Google acknowledges that it checks for problems only when notified. An assistant director of the FBI’s cyber investigations division told the Journal, “We are definitely seeing an increase in criminal activity.”

Who is responsible for damages from a malicious app that steals private information? Who is liable when software turns a mobile phone into a spamming machine or distributor of malware?

The technology is so new that there are few cases and even fewer precedents. If an online store for apps vets them before putting them on the virtual shelf, is there an implied liability for not taking proper care? What about Google, which operates a bazaar for apps?

Roel Schouwenberg, a senior malware researcher at Kaspersky Lab Americas, says that marketers and others could be blamed for those problem. In an interview with MobileMarketingWatch, he said he expects Google Wave, iPhone and Android could sustain heavy cyber-attacks throughout 2010. The victims, whether they be individuals or businesses, will look for legal help in recovering from losses.

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The level of industry and government interest demonstrates how far mobile phone apps have made their way into the consumer market. Companies and software developers aren’t arguing over an unproven technology; mobile apps have generated rich rewards and now the battle is over who gets the money.

U.S. anti-trust regulators are looking into whether Apple is stifling competition by banning Flash from its mobile devices. The Associated Press reported on May 4 that two federal agencies are deciding which of them should lead the investigation.

Beyond the corporate rhetoric, there are implications for Apple. The company could be forced to open up its mobile OS to Flash and other developers. Federal agencies could also look at Apple’s iAd practices and take action there as well. Just as important, federal scrutiny could bolster the fortunes of Flash-friendly phone types such as Google, HTC and the like.

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The previous week, Apple filed a lawsuit against HTC, claiming the Taiwan-based phone maker infringed on 20 patents related to the iPhone.

The lawsuit was filed concurrently with the U.S. International Trade Commission and in U.S. District Court in  Delaware.  For the ITC claim and the complaint in the Delaware action, click here.

Ostensibly, the fight is between proprietary software and services (Apple) and open systems (Google).   But the Times describes the battle as intensely personal, with CEOs Steve Jobs and Eric Schmidt engaged in nothing less than World War III.  Who will win?

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However, it seems that Apple was acting more in its interest than that of the public. Apple is highly protective of all its properties, especially its Apps Store. And that could pose problems for the company.

According to one news source, Apple’s offical reason for banning these apps is because they were deemed “sexually inappropriate.”  Some seemed to deserve the “inappropriate” donning while others were simply shooting for a cheap laugh.

By rejecting or removing this many apps at once, Apple received a lot of criticism from iPhone users, apps developers and the media.  Apple promptly responded to the public outcry by posting new guidelines to submitting apps, which can be viewed at MobileCrunch.

The new rules are controversial and hypocritical, even for Apple.  What’s more concerning, however, is the thinking behind this list and the rejection or removal of these apps: censorship. Apple seems to be increasing its censorship in regard to its apps.

The harder that Apple clamps down, the more likely it is that the company could be challenged. As Apple censors more material, its users and developers alike will find that their First Amendment rights are being infringed upon.  And if there’s one thing Americans don’t like, it’s having their First Amendment rights stripped from them.  Thus, if Apple continues its path down this slippery slope, it will likely find itself steeped in Constitutionally-based lawsuits.  Also, the more Apple alienates its users and developers, the more likely it is that they will simply leave Apple for another, less restricting alternative.

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Mediapost reports that WAC’s goal is to unite the apps market. A wholesale platform would create a single point of entry for developers, which is exactly what a company like Apple would contest. Apple did not attend the Mobile World Congress’ Conference last month.  The aim would be for smaller and larger developers to become essentially one large, united community for the mobile operating systems, carriers and others.

Creating the alliance would require a set of common open standards that would allow developers to create apps for different platforms.  Doing so would likely utilize standards that some mobile carriers have already started to adopt, such as JIL and Bondi. Those would eventually merge into one common standard.

Although the goal is to create a platform, the alliance also appears to be challenging Apple and its App Store.  Even before the alliance, major U.S. carriers such as AT&T and Verizon, as well as large tech companies such as Google and Microsoft, launched their own app stores.  Apple still holds a large advantage, which seems to be the ultimate driving force behind teaming up: to close the gap with Apple by luring developers away with  the opportunity to reach many more customers through a common, global platform.

The alliance’s goal is easier said than done.  Putting aside the difficult task of creating and integrating a common app platform and standard for different carriers, there is still the equally difficult task of developing mobile content, which only Apple has successfully done up to this point.

Thus, the market is there, but will these companies be able to put everything together to compete with Apple?  Apple could decide that the new standard violates its apps development standards. Therefore, another question must be asked: could the alliance lead to a marketing or legal showdown with Apple?

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