Under The Law, Location May Not Be Private—But Your Customers May Have Their Own Ideas

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.

In a brief filed with the U.S. Supreme Court last month, the Department of Justice suggests that there is no expectation of privacy in location data and that the only limitations relate to the manner in which such data is collected—specifically, if it is collected from a phone company or by other means. "Look," the DOJ essentially argues, "you are on a public street/sidewalk/office building. Anyone can see you. How can you expect that to be private?"

Even if the Supreme Court rules that customers don't have a right to privacy in their location, we are talking about customer sensitivities more than Fourth Amendment search and seizure jurisprudence. Smartphone apps can leverage GPS or other location data and enable new sales and marketing opportunities. But consumer backlash may result in new regulation to restrict the collection and use of this information. If you fail to have clear and unambiguous privacy policies that state what you are collecting and why and then follow these policies, either the consuming public or the government will make you do it.

We have all seen enough episodes of cop shows where the two industrious gumshoes "put a tail" on a suspect—no subpoena, no warrant, no probable cause, just a couple of coffee-soaked detectives in a 1974 Chevy Impala. Supreme Court precedent seems to suggest that this is OK. If you want to take a peek over a neighbor's fence—as long as you aren't trespassing—it's cool, because there is no "expectation of privacy" in an "open field."

In fact, you can use technology to enhance your ability to see what happens in public. No Chevy Impala? No problem. You can use an airplane, a helicopter, a satellite, thermal imaging, radar or strategically positioned cameras to do the work of the two detectives. No expectation of privacy means just that—no privacy.

The case before the Supreme Court involved the FBI putting an electronic device on a suspected drug dealer's car that would collect the car's location from GPS satellites and transmit this information in real-time to the cops. DOJ's argument: No privacy means no warrant required, ever. Needless to say, the defendants disagree.

As a retailer, you don't have to worry about all this cops and robbers stuff. As a shopper walks through the mall, security cameras capture his image constantly. The same is true on many urban streets and in strip malls, shopping centers or other retail outlets. It's a relatively trivial matter to create a matrix of these cameras to track the location of shoppers.

Link that image data to the POS terminal, and you have identity and purchasing information about the guy wearing the striped shirt and the silly hat. Add facial recognition software, and you can spot the same guy a week, a month or a year later. All of that without a single smartphone app. So the starting point of any discussion is whether or not there is even any "expectation of privacy"—provided that someone is in a public or semi-public place.

Recent news reports castigated certain Web-based applications like Pandora (the Web-based music streaming app) for collecting and transmitting information about consumers without clear notification. Related flaps revolved around allegations that the iPhone was both collecting and then storing location data in a file on the phone that was not secure and was accessible to law enforcement agents. Finally, reports of security flaws and vulnerabilities in various Google Android and other apps raised the possibility of a "perfect storm" for government regulators.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 user some 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 they do 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.