Federal Appeals Court Green-Lights Tracking Shoppers By Mobile

Written by Mark Rasch
September 4th, 2012

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.


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.