Mobile commerce

Marketers Slam Apple's Privacy Invasion

CHICAGO -- Apple Inc. (Nasdaq: AAPL) is rolling out its new iPhone operating system this week and prepping its iAd platform for use. Along with the deployments came an updated privacy policy that has members of the mobile marketing community crying foul.

According to Apple’s new contract, it maintains the right to collect and share "precise location data, including the real-time geographic location of your Apple computer or device."

Kristine Van Dillen, director of industry initiatives and partnerships for the The Mobile Marketing Association (MMA) , says this isn’t an appropriate use of an explicit opt-in policy.

In fact, it's exactly what the MMA has been trying to deter.

The MMA, a global trade group that speaks for more than 600 mobile marketing stakeholders, publishes a list of guidelines and best practices for mobile marketers, and the unfettered use of precise location data is certainly not one of them. The entire industry is excited about the possibility of location-targeted marketing campaigns, but Apple could be ruining it for everyone.

"Unfortunately, Apple has taken it upon itself to try to set some standards, and, ostensibly, it's about privacy," Van Dillen said at the People Tracking and Location conference in Chicago.

"My intent is that we're ahead of other companies trying to do something similar. If there’s a precedent that not sharing information with too many people makes it somehow protected, the MMA doesn’t believe that," she added.

Location information is regarded as "protected" data: The consumer should have the ability to control with whom they share information, stated Van Dillen. If consumers can control the data sources, opt in to the service, and know the value they are getting in return, the MMA will give its seal of approval. But the consumer, not the company, must be the party that makes the decisions.

Apple’s updated policy does say that data is collected anonymously in a way that doesn't personally identify users, but adds that it's "used by Apple and its partners and licensees to provide and improve location-based products and services." Users also have to agree to the terms before they purchase from iTunes, but the potential for misuse or, nearly as detrimental, consumer perception of misuse, is significant.

Apple isn't alone in seeking to mine location-based data, but it's taking steps that others aren't.

For example, Verizon Wireless manager of business product development Anik Kain said the carrier, too, is working on a location-based advertising strategy, but is still waiting for the right platform and to flush out the privacy issues. With the granular data carriers have on subscribers, they are subject to even higher levels of scrutiny than a consumer brand such as Apple.

That’s why it's no surprise that Apple is jumping ahead -- the industry is not solving the location-based ads problem quickly enough, Van Dillen said. Operators aren’t moving on it. Google (Nasdaq: GOOG) hasn’t leveraged its Quattro Wireless acquisition to fire back, and brands and dedicated ad networks have only touched on the power of location.

"Verizon can’t move the market by itself," said Ira Gorelick, senior manager of business development at Verizon Wireless. "It has to look to others to help move it."

Apple is certainly acting as a first mover in this space, and while some see the rising tide lifting all boats, other are worried about the precedent Apple could be setting. It could also attract further scrutiny from the Federal Trade Commission , which is already questioning Apple for anti-competitive practices surrounding its blocking of mobile ad companies affiliated with a developer or distributor of mobile devices or mobile operating systems (a.k.a. Google). (See Apple, Apps, Ads, Antitrust & Adobe.)

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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