Location Privacy: Will It Derail Mass Market LBS?

May 11, 2011  - By
This column rarely covers privacy as a critical issue to build location-based services markets. Why? It was our contention that most LBS are opt-in — or opt out — at the discretion of the consumer, making privacy an important issue, but not a market stopper. Frankly, many privacy panels at location conferences either bordered on hysteria, or were not relevant to market growth. However, since the recent Where 2.0 conference, which revealed that some entities were storing location information without users’ permission, the privacy issue has the potential of suppressing products and markets before they even start. Some are dubbing this new privacy concern Locationgate.


SATNA CLARA, CALIFORNIA — In a potential breach of public trust — and perhaps thwarting LBS market growth — it was revealed at the Where 2.0 conference here (April 19-21) that location data was secretly stored in all iOS 4 devices. Since the conference, where attendees learned that Apple was storing a file with location data in every iPhone or iPad with iOS 4, Sen. Al Franken (D-Minn.) asked Apple CEO Steve Jobs to address privacy concerns about the operating system, particularly for children, who make up 15 percent of users.

In a letter to Jobs, Franken asked why Apple consumers were not informed of the collection and retention of their location data, how frequently is a user’s location recorded, why is this information not encrypted, with whom has the information been shared, and what is the purpose of collecting the location data.

Apple contends that iOS devices are not logging the location of the user, but caching a database of Wi-Fi hotspots and cell tower locations around a user’s position. Some of these cell towers may be many miles away from the user.

At our deadline, Franken, chairman of the Judiciary Subcommittee on Privacy, Technology and the Law, will this week be heading the subcommittee’s first hearing, titled “Protecting Mobile Privacy: Your Smartphones, Tablets, Cell Phones, and Your Privacy.”

According to published reports, scheduled to testify at Franken’s hearing are Alan Davidson, Google’s U.S. director of public policy, and Bud Tribble, Apple’s vice president for software technology. Other hearing attendees include privacy experts and representatives from the Federal Trade Commission and the Department of Justice.

Privacy is becoming an issue for consumers who are using Facebook Places, Foursquare, Gowalla, Twitter, and other social media more frequently. In fact, one company, Neer, which is a subsidiary of Qualcomm Services Labs, has an entire business plan based on privacy. Neer’s social media system allows users to determine where, when, and to whom their location information is sent.

Location privacy is starting to be a big issue overseas. According to published reports, South Korea sent police into Google’s Seoul office this month to examine how the company’s AdMob platform and Android devices can collect private data about user’s location. Google purchased AdMob last year for $700 million.

In France, companies with with GPS-enabled devices are required to turn the systems off during an employee’s personal break, said lawyer Francoise Gilbert, in a privacy session at Where 2.0. “There is a significant difference in laws [overseas]. One size doesn’t fit all,” she said. “It is a bad idea to talk to your lawyer the day before you plan a product or website launch.”

In addition, at Where 2.0, the American Civil Liberties Union had a speaker and booth on site to educate developers on privacy issues. The ACLU was promoting its 2011 Privacy Challenge for developers of smartphones and other applications.

Where 2.0 LBS Developer’s Dream?

This year’s Where 2.0 was the largest ever. The crowd was overflowing with developers — and the companies that were happy to license products to them. Where 2.0 started out as an offshoot of the geographic information systems industry — and still has that GIS feel.

Navteq, which said it now has 50,000 developers in its network, showed off its Destination Maps product which features pedestrian-friendly guidance, including showing how they “cut across” open areas. The company rolled out advanced mapping collection technology, including rotating LIDAR, that captures 3D data points.

A number of significant announcements came during Where 2.0, but were not made at the conference. Boston-based Where was purchased by eBay for $135 million in as big a deal as any this year in the LBS industry. According to published reports, Where was considering an acquisition bid from Research in Motion.

Where, formerly called uLocate, was founded in 2003 to provide location tracking for GPS-based cell phones. The company changed its name and refocused on LBS markets to include a location-based advertising network, location search, and recommendation applications. The company rapidly grew — from 30 employees to more than 120.

In another deal made within a day or so of eBay’s, Groupon bought Seattle-based Pelago for an undisclosed amount. Pegalo CEO Jeff Holden, a former Amazon executive, will head Groupon’s product development. Pelago operated a check-in service called Whrrl.

In other industry news:

  • ALK Technologies recently announced that industry veteran Barry Glick is joining the company as chief executive officer. Glick, who led GeoSystems and launched MapQuest, has been involved in high-profile company sales. GeoSystems, and MapQuest, was acquired by AOL/Time Warner. Glick later was at the helm of France-based Webraska Mobile Technologies, which was sold to Sanef. Glick moved on to Navteq, where he was vice president of mobile and media products. Glick’s hire and track record make those in the industry wonder if he plans to spearhead the future sale of ALK.
  • I have written about location technology markets for nearly 19 years. Call me a grumpy old man, but every time I pull out my reporter’s notebook to write something down that a young Google, eBay, or Facebook executive has to say at a location conference, they say zero about the market, or frankly, anything relevant. Sad thing is that people show up to see these big-name companies — only to be disappointed. Seems as if these younger execs say a lot, but say nothing. One seasoned industry executive in the crowd lamented, “This person runs (insert company)’s location efforts — and said zero about the location market and how they fit into it.”


This article is tagged with , , , and posted in Mobile, Opinions