Evan Schuman's StorefrontBacktalk

Attorney Mark D. Rasch is the former head of the U.S. Justice Department’s computer crime unit and today serves as Director of Cybersecurity and Privacy Consulting at CSC in Virginia.

Retailers wrestling with how far they can legally go with tracking shoppers’ movements within their stores and in neighborhoods near their stores have been given an unexpected green light from a federal appeals court. The Sixth Circuit of the U.S. Court of Appeals ruled that Americans have no right to expect privacy when it comes to their phones’ location.

Although the case before the panel—which ruled August 14—involved accused drug traffickers, the jurists made it clear that privacy was not waived simply because of criminal activity. “We do not mean to suggest that there was no reasonable expectation of privacy because (defendant’s) phone was used in the commission of a crime, or that the cell phone was illegally possessed,” the Sixth Circuit ruled in its written decision. “On the contrary, an innocent actor would similarly lack a reasonable expectation of privacy in the inherent external locatability of a tool that he or she bought.”

That’s a crucial point for retailers, as was wording that people who could otherwise be seen by other people—such as when walking down an aisle at Costco or JCPenney or walking in a neighborhood near a Target or Walgreens—could not reasonably believe that their location is a Constitutionally protected secret. “We determine whether a defendant’s reasonable expectation of privacy has been violated by looking at what the defendant is disclosing to the public and not what information is known to the police,” the appellate court said.

The judges also suggested that shoppers’ lack of awareness of how easily—and how precisely—they can be tracked is not relevant from a Constitutional privacy perspective. “The drug runners in this case used pay-as-you-go (and, thus, presumably more difficult to trace) cell phones to communicate during the cross-country shipment of drugs. Unfortunately for the drug runners, the phones were trackable in a way they may not have suspected. The Constitution, however, does not protect their erroneous expectations regarding the undetectability of their modern tools.”

This decision may make it ever so slightly easier—or potentially a wee bit more legal—for retailers to collect this type of information, even if the consumer doesn’t agree. But this is not necessarily a cause for celebration.

There are various restrictions on the collection and use of location data. A retailer could hire a bunch of private detectives to follow every consumer around and find out what he or she buys and from where, and where each goes every day, and report back. Not terribly practical.

Big data applications, web tracking, and data sharing and data mining provide a good deal of that information to retailers already. What those options don’t say, however, is where a consumer is right now. For that you have to either install a device on the consumer or in his or her car, or track a device the consumer already has.