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The newest mobile privacy issue: Tracking shoppers’ footsteps in stores

Mark Sableman March 6, 2014

In our electronic-device age, new data privacy issues seem to pop up every day. Did you know that you were being tracked as you walked through a retail store?

Let’s think for a moment about mobile device tracking in retail stores. Do you care — or should you? Is this practice sneaky or expected? Harmful or helpful? Were you given notice that you were being tracked — and, if so, was it the usual kind of legalistic, hidden, easily missed notice? Can you opt out, and if so, how easily? Most importantly, what other questions should we be asking about this?

The FTC’s recent hearing on mobile device tracking at retail locations sought to answer some of these questions. (I live-tweeted the Feb. 19 hearing.)

Yes, you are being tracked at many retail stores. And no, it shouldn’t be all that surprising to you. As a modern American, you are, after all, carrying a smart phone that is constantly broadcasting its presence and the unique persistent identifier (MAC address) by which it is known, to the wireless world. You are broadcasting, and, in many cases, the stores are listening.

But calm down — they are not listening like the caricature of an NSA eavesdropper. They are not listening to your conversations (unless you are talking so loud in the store that everyone can hear you; please don’t do that, OK?). They aren’t reading your email. But they are watching where you walk in and around the store. It’s called “mobile logistics analytics” and it’s kind of interesting.

As explained through sample reports posted by the Future of Privacy Forum, which facilitated a Mobile Location Analytics Code of Conduct, data compiled from mobile device signals can show how well outside traffic converts into store visitors (“shopper funnel reports”), and how long shoppers dwell in stores and particular zones within stores. Such reports, focused on data aggregated from multiple shoppers, help store managers run their stores better. There was even a suggestion in the FTC hearing that customer-traffic “heat maps” could alert managers when lines are long and more help is needed at check-out counters.

The recent voluntary code of conduct for mobile analytics, developed as a self-regulatory framework for retail use of mobile location analytics, sets out seven major principles to govern this activity. One principle provides for “limited collection,” meaning that only aggregate and de-identified data should be saved and analyzed. Another requires that the data should not be collected or used in an adverse manner for employment, credit, healthcare, or insurance eligibility or treatment.

Of course, two of the big issues are the usual privacy concerns of notice and choice. What kinds of notice should be given, and what kinds of choices should be provided to consumers? At the FTC hearing, Ilana Westerman, CEO of Create with Context, Inc., gave an interesting overview of her company’s research and work on providing effective notice. She began with some revealing basic research (for example, 97 percent of people will give up information if they get something in return) and insights about effective notice.(She discovered that notice on signs and devices really aren’t very effective). She recommended a multi-layered approach to notice, including “ambient awareness” promoted by signs and symbols. A yet-to-be-developed standard symbol for data collection could help on this front, Westerman said. 

The industry code provides an opt-out mechanism for consumers who do not want to be tracked in this way, allowing them to enter their preferences on a central opt-out site. Like many data privacy mechanisms, it works in a somewhat counter-intuitive manner — your device will be detected and logged, because that logging is needed to ensure that the retailer can comply with your opt-out request and not use your device signals for tracking analytics.

Another hearing participant, Seth Schoen of the Electronic Frontier Foundation, raised questions going beyond current mobile logistics practices. He criticized the tech industry for creating devices that broadcast unique persistent identifiers. The kind of mobile logistics “heat maps” that retailers now use, he pointed out, could work even without unique persistent identifiers. He cautioned that because our devices broadcast signals that are unique and persistent, those signals can, in some circumstances, be linked back to us.

It is an important concern, and one that the FTC is likely to keep in focus as it examines other ways in which mobile device information is collected and used. Mobile devices, it seems, are going to present us with many more new and intriguing data privacy issues.

Mark Sableman is a partner in Thompson Coburn’s Intellectual Property group. He is the editorial director of Internet Law Twists & Turns. You can find Mark on Twitter, and reach him at (314) 552-6103 or msableman@thompsoncoburn.com.