Location-based apps a gold mine for advertisers but minefield for privacy advocates

The rising popularity of location-based services and applications has been described as potential gold mine for advertisers and a potential minefield for privacy advocates. Applications like FourSquare, Yelp, Google Latitude, AroundMe and Poynt use the GPS capabilities on mobile devices to track users’ locations and help them connect with friends, play games, or find local businesses in their immediate vicinity. “The location information is incredibly attractive to advertisers,” Teresa Scassa, Canada research chair in information law at the University of Ottawa, told The Wire Report. “And very valuable to the companies that run these location-based services, because if they find a way of providing that information to advertisers for mobile marketing purposes, it’s a gold mine.” But the value of location-based data has also caught the attention of the Office of Privacy Commissioner of Canada. On April 29, the privacy commissioner will host a panel in Toronto to explore the potential privacy concerns tied to location-based tracking. “People have to be aware that when they , their information might be seen by people beyond the circle of friends that they’ve permitted to view that ,” Scassa said. Services like Google’s Latitude, an application that lets Google users share their location with friends and family, have built-in features to protect customers’ privacy. “For starters, it’s built on an opt-in model,” Jacob Glick, Google’s Canadian policy counsel, told The Wire Report. “You select who your friends are going to be in the system, and you have to accept an invitation to hook up with them.” Glick said only the friends selected see the user’s location. “If you don’t enable location history, the service doesn’t remember where you’ve been after you move locations,” he added. But Scassa said there could be problems if a device falls into someone else’s hands. “That level of privacy concern is something that is not within the control of the companies,” she said. Scassa said a stalker ex-boyfriend could follow an ex-girlfriend’s movements with a service like Google Latitude through the assistance of a mutual friend who follows her. Companies or law-enforcement agencies could also buy location information from the companies that provide the services. “Another level of concern is what the company does with this geo-location information,” Scassa said. “As these things arise, if a business or application provider does not fall into good practice—which will happen, or if something turns up unexpected—the privacy commissioner has the ability to step in,” Gordon Gow, an associate professor at the University of Alberta who specializes in mobile and wireless communications, told The Wire Report. “I don’t see it as a ‘sky is falling’ kind of scenario.” At any rate, many smart phone users have decided that the benefits of location-based services outweigh privacy concerns. “I’ve used on a number of occasions to connect with friends when I’m out and about, and friends have used it to connect with me when I’m in a particular city,’ Glick said. “Just this weekend, when I was in Montreal, I had a friend who’s also on Latitude, and he said, ‘Hey, I noticed you’re in Montreal. I just landed too. Maybe we can meet up for dinner.’” Chetan Lal, director of products and services at Telus Corp., said location-based services also have uses that are less obvious than meeting friends for dinner. Credit card companies, for example, could see if customers’ purchases are legitimate based on locations obtained through the applications, he said. “If it’s a false transaction, it’s easy for them to know that the city you’re in is Toronto, and the transaction is actually taking place in Ottawa,” Lal said. Glick said people use Google’s service to keep tabs on family members and partners during outings or to plan dinner. “I saw a story on The National yesterday where Toronto has one of the longest average commutes of anywhere in North America,” Glick said. “If you imagined you’re in the car at that time, it can be a really great way to communicate with your spouse or your partner.” From a business perspective, location-based services show a lot of promise, especially in leveraging targeted advertising. “I don’t think anyone has found the yellow brick road yet, but that’s not to say it can’t happen,” Iain Grant, head of telecommunications research firm the SeaBoard Group, said in an interview. Grant said the market for location-based applications and services has become a territory of third-party developers at the expense of the carriers. “The carrier has essentially been excluded,” Grant said. “That is certainly one major revenue stream, which they fought back in the day, say five years ago, when this was first mooted to be a carrier revenue stream.” But Lal said Telus does not see the third-party application developers as competitors. “We want third-party applications to leverage our location API ,” he said. “I think at the end of the day, we need to keep in mind that these platforms are for the use of the client.” Lal said carriers will play the role of enabler by letting other applications access their networks as location-based services become more ubiquitous. But that position has come to the detriment of the carriers, Grant said. “The application stores of iTunes, Android, or even RIM, are making the money, whereas the Rogers, the Bells and the Teluses of this world are merely providing the transport,” he said. Google would not divulge the number of Latitute users, but Glick said there are no plans to monetize the Google application. He said there are ads on Google Maps, however, and some experimentation with advertising on the mobile version of the maps program. “I think location is another part of the relevant information that we’re hoping to bring to people to help them navigate the world’s information,” Glick said. “So you know better about what’s around you when you know where you are.” jmigneault@thewirereport.ca

Location-based apps a gold mine for advertisers but minefield for privacy advocates

Broadcast | April 1, 2010

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