To improve the situation, the FTC wants the app industry to develop "best practices" to protect privacy, and says it will launch its own consumer education efforts. The agency will also investigate "certain entities in the mobile app marketplace" to see if any of them have violated the Children's Online Privacy Protection Act, or have engaged in unfair or deceptive practices. The report doesn't call out any specific apps.
On the bright side, some efforts by Apple and Google may help. In iOS 6, Apple added the capability to limit ad tracking (under Settings > General > About > Advertising) and to restrict access to location and other personal data (under Settings > Privacy). Google has added new restrictions for app developers to crack down on privacy violations, and allows users to turn off personalized AdMob ads under Google Play settings.
Device makers could also put forth more concerted efforts to create kid-friendly environments. Amazon's subscription-based FreeTime Unlimited service is a good example: it provides pre-screened apps for kids that have no advertisements or social media links. The Kid's Corner feature in Windows Phone 8 also creates a safer environment for kids, with social media sharing disabled, but it doesn't control advertising behavior.
Those types of features at the operating system level may be more effective in the end than trying to shame app developers into behaving. With so many apps on the market, the FTC may always find room for disappointment.