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Mobile location-based services teeter on ethical line

Mobile location-based services can yield information about customers, but companies need to travel a careful line with the information they gather.

The first time I browsed the web, I was 8 years old. My parents caught me, sat me down and said, "If you ever go on the internet, never share your phone number, address or name." I followed that advice for years, but today we live by different rules.

How much do you value your privacy? Maybe a better question might be: How much would you pay to be anonymous? Today, with new technologies that can pinpoint your preferences, purchases, location and more, anonymity is becoming more than a precious commodity -- it's becoming impossible to achieve.

New approaches to sales and marketing are all about gathering customer data that is quite personal. Consumers are often willing to give up this data in return for discounts and other offers that give them exclusive information. But companies and consumers need to be careful about how they gather and yield this information. It can easily step over the line. Consider mobile location-based services (LBS).

Mobile LBS allow companies to track your physical location and offer discounts or tailored messages to you. Tracking takes place through mobile phones, which allow incredible accuracy and on-demand positioning. Consumers use this information depending on their needs. For example, when you dial 911, the GPS in your cell phone triggers and sends location information to a dispatcher. This allows emergency personnel to identify your location, even if you don't know where you are. It has even allowed dispatchers to track victims of kidnapping without ever speaking to a person. This is one reason why any cell phone -- regardless of whether the phone is connected to a telecom carrier -- can contact 911.

Crossing the ethical line with LBS

Providing emergency services is a no-brainer. You would be hard-pressed to find an ethical debate against this type of location-based service. This on-demand service is widely known and accepted. The information exchanged is beneficial for all parties, from the customer to the provider. There is an exchange. But the bright-line ethics start to turn gray when consumers are unaware that they're being tracked, and the information benefits only one party.

Facebook tested the capability of suggesting new friends based on your geolocation. Some observers viewed this as a breach of trust.

Android app Brightest Flashlight by GoldenShores Technologies LLC is a clear example of how to make customers feel abused. The owner, Erik Geidl, sold the real-time location information of more than 50 million Android users to ad networks and other third parties. The application was used to turn users' cell phone LED on and off like a flashlight. No one expected tracking was involved. Although his business model was widely considered unethical, the Federal Trade Commission was unable to enforce anything substantial due to Geidl's privacy policy and license agreement that everyone had to accept to use the app.

Other situations are not as black and white. Some companies use consumers' mobile location-based services information to test new features. Facebook, for example, tested the capability of suggesting new friends based on your geolocation for four weeks at the end of 2015. The company used city-level location information, which is within its privacy policy. But some observers viewed this as a breach of trust. Users didn't like the prospect of seeing someone they walked past in a bar showing up on a Facebook friend feed. Others didn't see this personalization tactic as so serious.

But other industries are culprits for traveling a close line on mobile LBS ethics. RetailNext Inc. is an in-store analytics company based in San Jose, Calif., that characterized itself as the "first technology platform to bring e-commerce style shopper analytics to brick-and-mortar stores." The company went on to say, "More than 250 retailers in over 50 countries have adopted RetailNext's analytics software and retail expertise to better understand the shopper journey in order to increase same-store sales, reduce theft and eliminate unnecessary costs."

RetailNext uses a combination of detection of Wi-Fi enabled devices, point-of-sale systems, video camera feeds and free Wi-Fi. It can combine that location information with sales, loyalty programs and weather data. In doing so, they can provide retailers powerful analytics regarding customers, including age and gender, the amount of traffic they receive through parts of the store, which areas are capturing their attention and even how the staff is interacting with them.

This information is valuable for physical shopping centers that are struggling to stay competitive with online sales. Data derived from customers' mobile location-based services can help answer some insightful questions: Are customers price matching a product to ensure that they're getting the cheapest price? Why are people spending an average of three minutes at the sample station, but never making a purchase? Having real numbers associated with this information can enable retailers to react accordingly -- with accuracy -- and gauge effectiveness.

The debate for personal privacy will continue as we venture further into an age where the information can be collected and accessed so easily. Take steps to increase your awareness and talk about it with those around you. How? Start by reading the privacy policy and end-user license agreement before blindly hitting "accept" the next time you install software. Are you someone who finds safety in numbers, or do you think this is an infringement on anonymity?

Next Steps

Location-based services hit the streets

LBS eases marketing hurdles, brings privacy issues

Customer trust key in mobile LBS

This was last published in July 2016

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