ó Signals emitted by your smartphone leave a digital
trail that retailers can follow to find out how long you
lingered in front of a sales rack or languished in a
growing number of mobile analytics companies use the
Bluetooth and Wi-Fi beacons broadcast by smartphones to
help retailers monitor customersí movements in
shopping centers, casinos, restaurants, hotels and
such company, iInside of Yorba Linda, Calif., boasts on
its website that its sensors can pinpoint a customerís
location within a single meter of floor space.
a larger scale, mobile carriers such as Sprint, AT&T
and Verizon also use location data gleaned from cell
towers to send ads for nearby businesses to customersí
phones, for example, or to prepare marketing reports on
how many subscribers visit a cityís football stadium
ó and what kinds of applications they use during the
of the technology say the data gathered helps
brick-and-mortar retailers compete with online rivals by
personalizing and streamlining the customer experience.
But consumer advocates warn that the mobile tracking
trend underscores the need for stronger privacy laws.
Federal regulators are taking a closer look at the
understanding is that in many cases this is basically
invisible to consumers, so we want to look at whether
retailers or the companies theyíre using are notifying
customers of whatís going on," said Amanda
Koulousias, a staff attorney with the Federal Trade
Commission, which recently hosted a seminar on mobile
tracking in Washington.
that collect and sell mobile location data are eager to
demonstrate that theyíre capable of self-regulation.
In a move timed to coincide with the FTCís seminar,
the Future of Privacy Forum, a research center in
Washington, announced the creation of a website ()
that allows consumers to opt out of having their
locations mapped by participating companies, including
iInside, the California company.
same group of companies signed a voluntary code of
conduct, agreeing to collect only
"depersonalized" location information unless
customers give consent, and to alert customers to the
use of tracking technologies by promoting the use of
data collection signs in stores.
the end of the day I think market forces prevail, and
those retailers and other businesses that violate the
trust of their consumers will be punished by the
marketplace more than anything else," said Jim
Riesenbach, the chief executive officer of iInside, who
was a panelist at the FTC seminar.
pointed out in an interview that surveillance in stores
is nothing new, although mobile technology allows
retailers to analyze customer behavior in greater detail
than ever before.
have been camera systems in stores for many years, not
only for surveillance standpoint but also from a
traffic-counting standpoint," he said. "Thereís
systems in stores that allow retailers to check how many
people walk in the door and how many people walk out the
door and things like that, and so what weíre doing is
taking that to a much more granular level."
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how it works: Riesenbachís company sets up sensors in
clientsí stores. The sensors pick up probes emitted
about every 60 seconds from Wi-Fi-enabled smartphones,
and continuously by Bluetooth-enabled smartphones. The
probes include a 12-digit code, known as a MAC address,
which is unique to each phone.
a scrambled version of the MAC address, the sensors can
monitor how long a customer waited for a cash register,
which aisles the customer browsed and how many times
that customer returned to a store or visited different
stores in the same chain.
data compiled donít include personally identifiable
information such as usersí names or addresses. In that
sense, proponents say, itís similar to a real-time
traffic map that shows cars identified by license plates
or vehicle identification numbers but not by drivers.
retailers are quietly testing the technology. The number
of stores that installed iInsideís sensors grew
eightfold last year. Riesenbach declined to identify any
of his companyís clients, however.
reticence speaks to the sensitivity of mobile tracking,
as businesses try to take advantage of the new
technology without alienating customers.
clients are basically private about what they are
doing," he said. "They donít know how itís
going to be reported; theyíre worried that things can
be taken out of context."
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also declined to identify clients who use its mobile
advertising or analytics programs, which launched in
carrier uses only anonymous, aggregated data, and it
protects subscribersí privacy by allowing them to opt
into personalized mobile advertising or opt out of
mobile analytics reports, said a corporate spokeswoman,
Stephanie Walsh. Users are notified of their choices by
text message, on bills and via Sprintís website.
Iím a businessperson, Iím a human, and I care very
much about my privacy and how my data is used,"
said Evan Conway, vice president of strategy for
Pinsight Media(Plus), a Sprint subsidiary that handles
mobile media projects for the carrier.
we are so much more careful than any of the experiences
that people are used to online," Conway said.
"If you look at the online world, theyíre busy
dropping cookies all over your computer, sharing where
youíre going with whoever is interested. Thatís kind
of diametrically opposed to the whole approach that
itís commendable that some companies limit the ways
they use tracking, the barriers to entry are very low
and the temptations are great, said Seth Schoen, senior
staff technologist for the Electronic Frontier
Foundation, a digital civil liberties group.
can set up location tracking sensors at any time. You
donít need more sophisticated hardware than a regular
laptop," Schoen said.
very little consumers can do to protect themselves other
than disabling Wi-Fi and Bluetooth on their phones or
turning them off completely, he said.
fact that mobile devices are easily trackable is a
fundamental security problem, Schoen said.
phones were nominally built to enable communications at
the userís request, and for what are sometimes obscure
technical reasons and unintended consequences of
engineering decisions, theyíre effectively shouting
into the radio spectrum to announce the userís
presence all day long," he said.
I think we have to articulate that that state of affairs
isnít what users want, it isnít something they
mostly are aware of, and itís something that needs to