Partner Article

The Growing Importance of Legal Compliance in App Development

Hammad Akbar, a Danish citizen and entrepreneur who was educated in the UK, saw his businesses collapse a year ago as the US Department of Justice shut down his most successful app.

StealthGenie offered easy ways to monitor and control use of data and was a firm favourite for exhibiting parental controls on mobile devices, quickly finding its place in a variety of global markets. It also was marketed to reach out to families and partners looking to keep track of one another and it was for these purposes that brought the successful app to its demise.

Akbar was on the verge of selling part of his business that included StealthGenie and had almost completed Due Diligence. Part of the deal was to land him a seat on the Board of a Plc. The deal fell through and, in the space of a few weeks, the entrepreneur had to close down the majority of his operations.

On the same day that Akbar was detained, Amazon – which was hosting the StealthGenie app on its AWS servers in Virginia – was ordered to take down all information and related accounts and to remove all links to related domains. Domain owner Verisign was also told to block access to related domains and deny access to Akbar and his development teams, which was then comprised of over 100 staff.

The app was deemed to be “useful for the surreptitious interception of wire, oral or electronic communication” and was therefore deemed as a violation of the never before used law, 18 US Code 2512, despite being declared complaint with US legislation in 2013.

After a short detainment and growing pressure from the US Department of Justice to plead guilty, Akbar was fined $500,000 and forced to withdraw the internationally successful app which, at its peak, turned over six-figure sums each per month.

Akbar says: “Despite having a legal compliance report for the full suite of apps, the international success and nature of my organisation attracted the attention of authorities and, despite its lawful status, was not enough in the face of a government keen to make a prosecution.

From my experience I would strongly advise developers to enlist the help of a specialist legal firm, but I would warn that this may not offer the comprehensive protection you would expect. In the case of USC 2512, no lawyer in the US had experience of the Code prior to my detainment and, in this modern and ever changing field, it’s critical to stay on top of it all.“

Akbar, in addition to building a new business named TruConversion, an all-in-one analytics and feedback application for e-Commerce owners, also works with young, UK tech start-ups to provide help and mentoring based on his experiences.

Commenting on this Akbar added: “Working within a global market place presents new challenges too, with selling in different territories presenting owners with different or even conflicting sets of regulation. High-speed growth is great but it can make it difficult for owners and investors to stay ahead of changes to the legal and regulatory landscape, but this should be vital to monitor, rather than an afterthought.”

This was posted in Bdaily's Members' News section by TruConversion .