Location Tracking and the Trouble With ‘Opting In’

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Location Tracking and the Trouble With ‘Opting In'

By Kate Kaye

Anyone who's opened a new app lately has seen a location- tracking pop-up that reads something like, “Allow app to access this device's location?” Most people tap “Allow” on the assumption that it's necessary for the app to do its thing—to hail a ride, find nearby restaurants or forecast the weather. And then they forget about it.

In reality, the app might not need location data in order to work. But its business partners do, and so do its partners' partners. In fact, making money off otherwise unnecessary location tracking may be the main reason that the app was developed in the first place. And many companies treat consumers' initial “Allow” as a blanket opt-in for a range of later data uses.

“That's the question: How many degrees does your opt-in extend?” asked Cree Lawson, CEO and founder of Arrivalist, a firm that relies on location data.

The widening chasm between consumer consent and what happens next could invite a backlash against the booming business of applying location to marketing. The uses of consumers' movements have already gone beyond consumers' expectations. But not even the practitioners of the craft always know exactly where their data originates, or how.

It's common for third-party ad services and data firms to get location data via ad exchanges, but it's less common for them to discuss the practice or reveal the app origins of the data. Why? Sometimes they simply have no way of knowing where the information comes from. For one thing, agreements with app publishers may require that specific apps not be named. Also, data compilers often do not include the names of apps in the location-data feeds they send to third parties.


FTC alarms

Last year, the Federal Trade Commission announced a settlement with Nomi Technologies, a small New York firm that was acquired by retail analytics company Brickstream in 2014. Nomi gathered mobile-device IDs through merchants' Wi-Fi networks or proximity sensors as people entered stores. The agency alleged that Nomi misled people by saying they could opt out from its tracking technology in stores when no opt-out tool was actually available.

“It's become increasingly clear that the FTC requires opt-in consent for the tracking of location data and I hope to see them taking that and applying it to beacon technology,” said Ms. Gartland from EPIC.

Earlier this year the FTC sent another signal to location-data trackers that it could continue pressuring the industry. The commission said mobile ad firm InMobi had followed device locations even when people, sometimes children using apps geared toward kids, disabled tracking or never consented via a particular app in the first place. The FTC alleged that InMobi violated the Children's Online Privacy Protection Act by tracking IDs of devices associated with children, which are considered to be personal information according to a 2013 COPPA rule update.

“We could be legislated out of business so we have to be super careful about COPPA compliance,” said David Dague, CMO at Gravy Analytics, a location-data firm backed by funding from Gannett.

The $950,000 FTC settlement with InMobi “should be a real wake-up call to the industry,” said Mr. Polonetsky.

The commission has bolstered its technology staff dedicated to researching potential violators of privacy regulations, he added. “The FTC now has a pretty detailed tech lab that has dozens of forensic tools,” he said.

Read full article and more about location-data tracking and the FTC here.

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