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Published: October 2012

Consumers are kept in the dark about location data collection and use, says government report

A study released by the Government Accountability Office (GAO) this week makes clear that consumers are mostly unaware of how companies operating on mobile phones collect and use or share location data, mostly because these companies conceal the truth about their practices. It also says the government needs to do more to protect consumer privacy on mobile devices.

Download a copy of the report entitled "Mobile Device Location Data: Additional Federal Actions Could Help Protect Consumer Privacy"

Below is an excerpt from the report:

Using several methods of varying precision, mobile industry companies collect location data and use or share that data to provide users with location-based services, offer improved services, and increase revenue through targeted advertising. Location-based services provide consumers access to applications such as real-time navigation aids, access to free or reduced-cost mobile applications, and faster response from emergency services, among other potential benefits. However, the collection and sharing of location data also pose privacy risks. Specifically, privacy advocates said that consumers: (1) are generally unaware of how their location data are shared with and used by third parties; (2) could be subject to increased surveillance when location data are shared with law enforcement; and (3) could be at higher risk of identity theft or threats to personal safety when companies retain location data for long periods or share data with third parties that do not adequately protect them.

Industry associations and privacy advocates have developed recommended practices for companies to protect consumers’ privacy while using mobile location data, but companies have not consistently implemented such practices. Recommended practices include clearly disclosing to consumers that a company is collecting location data and how it will use them, as well as identifying third parties that companies share location data with and the reasons for doing so. Companies GAO examined disclosed in their privacy policies that the companies were collecting consumers’ location data, but did not clearly state how the companies were using these data or what third parties they may share them with. For example, some companies’ policies stated they collected location data and listed uses for personal information, but did not state clearly whether companies considered location to be personal information. Furthermore, although policies stated that companies shared location data with third parties, they were sometimes vague about which types of companies these were and why they were sharing the data. Lacking clear information, consumers faced with making a decision about whether to allow companies to collect, use, and share data on their location would be unable to effectively judge whether the uses of their location data might violate their privacy.

Federal agencies have held educational outreach events, developed reports with recommendations aimed at protecting consumer privacy, and developed some guidance on certain aspects of mobile privacy. The Department of Commerce’s National Telecommunications and Information Administration (NTIA) is implementing an administration-proposed effort to bring industry, advocacy, and government stakeholders together to develop codes of conduct for industry to address Internet consumer privacy issues generally. However, NTIA has not set specific goals, milestones, and performance measures for this effort. Consequently, it is unclear if or when the process would address mobile location privacy. Furthermore, the Federal Trade Commission (FTC) could enforce adherence to the codes if companies adopted them, but since adoption is voluntary, there is no guarantee companies would adopt the resulting codes. While FTC has issued some guidance to address mobile location privacy issues, it has not issued comprehensive guidance that could inform companies of the Commission’s views on the appropriate actions companies should take to protect consumers’ mobile location data privacy.

For More Information

Visit the Government Accountability Office's website

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Consumer Protection   ♦   Privacy/Rights   ♦