Evan Schuman's StorefrontBacktalk

The smartphone app collects more information than consumers know, transmits it to entities about which the consumer is unaware, and does so in a way that exposes this data to potential attack by hackers or others. Although the government may not think that location plus identity information is private, most consumers would disagree.

Many retailers have developed apps that exploit the geolocation features of smartphones, whether it is the ability to find a retail location near them, get driving direction, pre-order inventory en route or offer specials either directly or through third parties (for example, Living Social or Groupon) to consumers in the general area.

Many retailers that do collect or use geolocation data through apps do so without any special privacy policies other than those that appear on their general-purpose Web site. You know, “we respect your privacy” and “we share your data with third parties to conduct order fulfillment, etc.”

In fact, the apps themselves present little real estate for the types of detailed privacy policies we are talking about. But general-purpose Web site privacy policies are simply insufficient to meet the needs of geolocation data collection—now, and especially in the future. Companies that collect, store or use (even by inference) this type of data would be best served by developing and implementing privacy policies specific to this information.

The Web app itself should contain a link to the company privacy policy—and, even better, include an “opt in” requirement. The app should be designed to give the usersome control over whether or not to provide location data, and to whom and for what purposes that data can be given and used. The policy should be explicit about the nature of the information collected, how long it is stored (and how and where), how the information is used, with whom it is shared, how it is secured and other information consistent with principles of privacy protection.

Saying “we may share your information with third parties to fulfill the purposes of this site” simply won’t cut it. What third parties? Why? What do theydo with the information? How do they secure it?

A simple example: When you fire up your smartphone and click on Google Maps, you get a nice map with a blue dot showing exactly where you are. But to accomplish this, your cellular provider (AT&T, Sprint, Verizon, etc.) had to know where you were, either by GPS or by cell-tower triangulation. It had to pinpoint your longitude and latitude. It then had to send that information to Google over the Internet. And finally, Google had to interpret that information and deliver a map of that location with you in the middle.

As you move, the map moves, meaning that both Google and your cell provider know where you are going. How is this information protected? What does Google do with this information? How long is the information stored? Is it shared with anyone? Is it correlated with any other information? Is it aggregated? Is there trend analysis? Can the information be de-anonymized? Can it be subpoenaed by the government? By others? Can it be hacked?

All good questions. Nothing on the Google Web site or privacy policy tells me, except the general “we may share with third parties.”

Senate hearings on May 10 focused on all of these issues. We can expect many more. If companies—including retailers—do not become more explicit about how they are collecting, using and sharing location data, then we can expect the government will make them do so. And the government will know where to find you.

If you disagree with me, I’ll see you in court, buddy. If you agree with me, however, I would love to hear from you.