Senator Wants FTC To Clamp Down On Tracking, But How?

New York senator Charles Schumer has called on the Federal Trade Commission to force retailers to let shoppers opt out of in-store tracking based on mobile phones, Newsday reported.

Schumer said he sent a letter to FTC chairwoman Edith Ramirez on Sunday (July 28), asking that the agency investigate the tracking, calling it an "unfair" and "deceptive" practice. He proposed that the FTC require retailers to send an electronic notice to a customer's phone before actual tracking begins, giving the customer a choice to opt out.

Schumer's office specifically named Benetton, American Apparel, Swatch and Family Dollar as chains that use mobile-based in-store tracking. However, in a statement, American Apparel said it monitors only the number of people coming into the store and the number of purchases through its RetailNext system.

That lack of clarity about what specific retailers are actually doing probably won't have an impact on the political popularity of Schumer's proposal—after all, who's in favor of retailers playing Big Brother?

The difficulty is that what Schumer is proposing isn't clear either. Retailers have always tracked customers—first it was shopkeepers keeping an eye on strangers and pesky kids, then security cameras and loss-prevention guards, and now mobile phones. If the standard is not using mobile phones to track customers—which usually is done via Wi-Fi rather than cell signals—does that include tablets? And where does a ban on Wi-Fi tracking leave a store's ability to provide customer-accessible Wi-Fi, since there has to be at least minimal tracking just for wireless network management.

Then there's the problem of that opt-out opportunity. Does that have to happen every time? Even if the connection is via an app where the customer has explicitly requested the connection? And what about cases where the app uses a smartphone's geolocation function to continuously track the customer, so it can notify her when she's near a store. Where does the opt-out have to happen then—and how often?

And what if it's not an app from a retailer, but a third party like Shopkick?

None of these are new questions, and retailers have been struggling with how to notify customers about surveillance and tracking since before there were smartphones. It's a legitimate concern, and one the FTC has been staying on top of for years too. Given all that, it would be nice if lawmakers would make the effort to think the problem through.

For more:

- See this Newsday story

Related stories:

In-Store Tracking Gets More Media Notice, So Retailers Need To Boost Their Transparency
FTC To Retailers: If You're Collecting Customer Info, Say So Clearly
FTC Slaps Down Retail Use Of Tracking Software