Having established itself as the clear-cut leader in the growing daily deal industry with an army of loyal fans and customers as well as an anticipated $3 billion in revenue this year alone, one would be hard pressed to say that Groupon has anything to worry about these days.
Or do they?
Two members of Congress, Rep. Ed Markey (D) of Massachusetts and Joe Barton (R) of Texas, smell something a bit fishy when it comes to Groupon’s privacy practices and have submitted a written inquiry to the company requesting more information, specifically on the issue of possible ‘mobile tracking’ of customers.
Recently, Groupon updated its privacy policies and part of the revision was a clause that allows the company to track the locations of mobile customers, even when the Groupon mobile applications are closed on their mobile devices. Groupon initially said the change was part of its expansion of Groupon Now, which relies on geo-location technology in order to offer shoppers deals based on their real-time locations.
The policy states:
If you use a Groupon mobile application and your mobile device’s settings allow it, we may collect mobile location information from your device. Our application may be designed to collect information even if you are not logged into the Groupon application.
Included in the policy is another clause that says Groupon can share similar information with its retail partners that offer the actual deals featured in the service. This enables those merchants to communicate directly with consumers and target them with advertising as well.
The Markey and Barton inquiry requests an explanation from the company on how exactly it gathers location information when a user’s application is turned off, whether or not Groupon gives its customers an op-out option and whether its mobile data collection policy is consistent across all devices.
The pair, co-chairs of the Congressional Privacy Caucus, also wants more information on how and why Groupon plans to collect, and then use, consumer information. One passage of the letter references how the policy approaches children:
“Groupon indicated that it omitted a section in its previous privacy policy discussing children’s information because its web site is not geared toward children,” it reads. “What mechanisms does Groupon have in place to identify the age of its consumers?”
A spokesperson for Groupon says the company has received the inquiry and “looks forward” to explaining its privacy practices and overall business model to the lawmakers. Groupon has until August 10 to respond.
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