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Google And Apple To Answer Senator’s Questions

May 9, 2011

How much is your privacy worth to you? Knowing where you have been, where you are and when? For companies such as Google and Apple, apparently it is worth a lot. Since it was revealed last month that many smartphones are storing and sending your location data back to Apple and Google for use in marketing back to you.

Minnesota senator Al Franken will be heading a subcommittee on privacy and technology this Tuesday to question Google and Apple executives on the possibility that this tracking may violate the rights of the smartphone user.

“What’s the implications of the data in terms of revenues? The issue is in one word — huge. We think that by the 2014 time frame or so it will be well north of $3 billion,” Carter Lusher, an analyst with research firm Ovum, told Reuters.

“There are simply more and more devices shipped every day that can be targeted.”

Trade publication Mobile Marketer, in a study for Google, found that 82 percent of smartphone users notice mobile ads and 74 percent will make a purchase based on an advertisement that alerts them while they are shopping, CNET reports.

What is making users uncomfortable is the range of entities that may have access to this information, phone makers, app developers, advertisers, and what they will ultimately do with it, explained a staffer for senator Franken.

Randomizing the device ID frequently, or not transmitting it at all, would alleviate some concerns. Both Android and Windows Phone 7 devices appear to transmit unique IDs, in some circumstances. Google and Microsoft have declined to elaborate on that point.

Apple claims the data is sent “in an anonymous and encrypted form” and “Apple cannot identify the source of this data.”

This week’s upcoming inquiry remains as a way for lawmakers to seek more information on the technology and its potential uses. If public concern grows into outrage, lawmakers may eventually pass legislation restricting such activity.

Franken’s staff is concerned by reports that insurance companies have inquired into using location tracking in calculating insurance rates by tracking your habits such as eating out and gym use. Already three online privacy bills have been introduced but it is far too early to tell which, if any, of them might become law.

Proposals in the bills include companies telling consumers what data is being collected, who it is shared with and how it is safeguarded. “The fact is that they’re creating these sort of mobile digital dossiers based on what you do on your mobile phone and where you are,” Jeff Chester, head of the Center for Digital Democracy, told Reuters.

“Congress has a role to play here. Congress has not done a good job of updating privacy laws,” Marc Rotenberg, head of the privacy think tank Electronic Privacy Information Center, told Reuters.

The University of Pennsylvania’s Turow agreed, advocating a ban on collection of data on financial or health issues, perhaps even as minor as over-the-counter medicine purchases. “Executives in advertising don’t understand what’s going on,” he said. “I really do believe that we need ground level protections. And certain things should be prohibited.”

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