Mobile apps and consumer privacy continue to be hot issues for the Federal Trade Commission (FTC). On February 19, 2014, the FTC staff will hold an open seminar on privacy and related issues raised by mobile tracking technology.
On the FTC’s priority list at the moment: tracking strategies used by retailers and other businesses to track consumers’ movements in stores. Using signals emitted by mobile devices, stores are able to obtain data about a consumer’s shopping and browsing patterns. Retailers can use the information to provide the consumer with coupons or loyalty program incentives through their mobile devices or otherwise. The signals from the mobile device can allow tracking even if the shopper had not enrolled in a loyalty program or made a purchase.
The tracking is facilitated through the device’s “MAC address,” which is a unique address assigned to each cell phone when it is made. The MAC address is broadcast when a mobile device searches for Wi-Fi networks. By capturing and analyzing the data, companies can obtain information about consumers, including the path they taken in a store, how much time they spend in specific locations, and whether they are making new or return visits. According to the FTC, major retailers either are using or have tested this technology to gain insights into the behavior of their customers in the retail stores.
Although the MAC address does not, by itself, reveal any personal information about a consumer, when linked with data relating to loyalty programs, credit cards or other personal data, the privacy issues raised by the tracking technology increase. The FTC seminar will explore various models of permissions and notifications, including Retailer Alerts, “opt-in” permissions and signal blocking strategies. According to the FTC, the following questions will be discussed at the seminar:
- What kinds of mobile device tracking technologies do companies currently use?
- What are potential future uses of these technologies?
- What are the similarities or differences between mobile device tracking and online tracking technologies?
- What types of information and benefits do retailers gain from these technologies?
- What benefits do consumers derive from these technologies?
- What are the privacy and security risks associated with these technologies?
- How are companies addressing these risks?
- What information and choices are provided to consumers about this type of tracking?
Additional information about this FTC seminar is posted on the FTC’s website here.
This conference is the first of three FTC seminars on “Emerging Privacy Issues.” These seminars will review new technologies and trends in data collection and use, and the impact of each on consumer privacy. In addition to the February 19 seminar on mobile device tracking, the FTC plans to hold one in March on alternative consumer credit and predictive behavior scoring products, and another later in the year on consumer-generated and controlled health data that consumers provide to non-HIPAA covered websites, health apps and devices. Presenters at these conferences will include academics, business and industry representatives and consumer advocates. Each seminar will review the impact of new technology and analytics on consumer privacy.
We expect these seminars will emphasize the points made by the FTC in its 2012 Privacy Report: a) Privacy by Design: privacy considerations should be built into data collection technologies from the start; b) Simplified Consumer Choices: consumers should be given notice and the option to decide what information is collected and shared about them; and c) Increased Transparency: consumers should be informed about collection and use of their information and given greater control over their data.
Please contact us if you have any questions about the FTC’s views and recommendations regarding privacy or online marketing issues, and how the FTC’s views may apply to specific practices and technologies.