Should shoppers turn off their smartphones when they hit the mall? Or does having them on lead to better sales or shorter lines at the cash register?
U.S. retailers are using mobile-based technology to track shoppers' movements at some malls and stores. The companies collecting the information say it's anonymous, can't be traced to a specific person and no one should worry about invasion of privacy. But consumer advocates aren't convinced. It's spying, they say, and shoppers should be informed their phones are being observed and then be able to choose whether to allow it.
The Federal Trade Commission held a workshop Wednesday on the issue, part of a series of privacy seminars looking at emerging technologies and the impact on consumers. FTC attorney Amanda Koulousias says the commission wants to better understand how companies are using phone-location technology, how robust privacy controls are and whether shoppers are notified in advance.
Here's how the technology works:
_Your smartphone has a unique identifier code -- a MAC address -- for Wi-Fi and Bluetooth. It's a 12-character string of letters and numbers. Think of it like a personal identification number, but this address is not linked to personal information, like your name, email address or phone number. The numbers and letters link only to a specific phone.
_When your smartphone is turned on, it sends out signals with that MAC address (for media access control) as it searches for Wi-Fi or Bluetooth. Those signals can also be captured by sensors in stores that could tell a department store how often shoppers visit, how long they stay, whether they spend more time in the shoe department, children's clothing section or sporting goods, or whether they stop for the window display, take a pass and decide to move on.
Companies that provide "mobile location analytics" to retailers, grocery stores, airports, and others say they capture the MAC addresses of shoppers' phones but then scramble them into different sets of numbers and letters to conceal the original addresses -- a process called hashing. This is how they make the data they collect anonymous, they say.
The companies then analyze all the information those hashed numbers provide as shoppers move from store to store in a mall, or department to department in a store. Mall managers could learn which stores are popular and which ones aren't. A retailer could learn how long the lines are at a certain cash register, how long people have to wait -- or whether more people visit on "sale" days at a store. (continued...)
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Posted: 2014-02-25 @ 6:45am PT
Privacy is critical to a well functioning free market. If we let sellers collect "presence" information about buyers, we effectively giving them more power to gauge buyers and engage in other practices that maximize their revenues and profits at the expense of buyers.
MAC address not linked to personal information? Fallacy. Most cellphone when sold are in a box with the MAC address bar coded on the outside. Extremely easy to capture and link to the buyer's address at the point of sale, especially for online sales from Google and Apple. The MAC address of a device should be treated as personal information.
Capturing WiFi and Bluetooth MAC should be an opt-in business and forbidden by default, opt-out does not work. If I opt-out, they know I exist. I do not want the consumer hostile data miner to even know that I exist. At the moment, my only option is to turn my phone off. I find the limitation acceptable on private premises, but not on public space. It is their responsibility not to capture my signal when I walk on the side walk in front of their shops.