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Posts Tagged ‘consumer privacy’

Groupon’s Privacy Policy Catches Lawmakers’ Attention

Posted in General News / Technology, Mobile Commerce, tagged , , , , , on July 22, 2011 | Leave a Comment »

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.

Thoughts? Leave us a comment!

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Guest Submission: Apple’s Tracking Uproar

Posted in Guest Articles, tagged , , , , , on May 6, 2011 | Leave a Comment »

By Joseph Baker

News that iPhones and iPads were secretly tracking users’ information has raised the ire of privacy advocates.  However, it should be no surprise that anything with a proximity card could be used to track movement.

Researchers have revealed the latest iPhones and iPads are tracking web browsing, map searches and online purchasing.  However, Apple’s bad news came on the heels of good news.

It was recently confirmed iPhone sales reached 18.7 million units.  This, for the first time, allowed Apple ($11.9 billion) to top Nokia ($9.4 billion) as the largest handset maker by revenue, according to research firm Strategy Analytics.

I’m not into conspiracy theories, but it’s difficult to accept the tracking snafu as an accident.  Imagine, as a retailer, having access to your customer’s normal traffic route on any given day, their shopping habits (based on location and internet purchases), and even their Facebook data. How valuable would that be to you?

Over the past 10 years, retailers have spent billions of dollars trying to answer the question “Who is the customer?”

In 2010, Proctor & Gamble spent 11% of its $78.9 billion in sales on marketing, adding a 1.3% increase in overall revenue, with a substantial increase in the amount of e-commerce both for the placement of relevant ads and opportunities to participate in online surveys and focus groups, according to the company’s 2010 annual report.

This compares conversely with the decrease in utilizing traditional ads found in magazines, coupons, and bottleneck opportunities (subways, theaters, etc.). Back in 2006, 85% of all retailers planned to increase their internet advertising.

This heightened interest in online purchasing is directly linked to the reviews customers post about the product after purchase, according to retailers.  A customer can shop for something specific while at the same time reading the personal reviews of the users.  This increased traffic online has automatically created the “buyer map” that links behavior to buying patterns.  With ecommerce on the rise, these maps are only getting larger.

There is no question that Apple will survive this privacy controversy, they always do (and in their current state they always will).  The ironic point to be made is that the very people who complain about the systems they use will go on using the systems to the point that the very concern will be buried by the user’s own justification.  Convenience, it seems, takes precedence over tracking and security.

Joseph Baker has worked in the business world for over 15 years, specifically in management. He has led development and management teams, and implemented budget reductions both professionally and as an independent contractor. In addition, he has led strategic planning and systems of implementation for nine organizations, both public and private, and worked extensively with small businesses. He holds a Bachelors of Science in Marketing from the IU – Kelley School of Business and an MBA from Kellogg School of Management.

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Microsoft Promises Greater Consumer Protection with IE9

Posted in General News / Technology, tagged , , , , , on December 10, 2010 | Leave a Comment »

At a time when online and consumer privacy continues to be a hot-button topic in the corridors of power in Washington, D.C., Microsoft this week announced that it is adding an extra layer of privacy options and protections to the next release of web browser Internet Explorer 9.

The upgraded IE9, which is expected to debut early in 2011, will give users the ability to block third party sites from tracking their web browsing and online behavior.

Microsoft says the new Tracking Protection setting is an effort to even out consumers’ need for privacy and control while still letting them capitalize on the benefits that are out there from sharing their information.

“Consumers understand that they have a relationship with the site they visit directly, whose address is clearly visible to them,” says Peter Cullen, Microsoft’s chief privacy strategist.  “The modern web though means that web sites include content from many other sites as well.  These sites are in position to potentially track consumers, via cookies and other technology mechanisms.  This creates a potential trade-off for those consumers with privacy concerns.”

In a practice that infuriates web users everywhere, many websites that include outside content will let those content providers use tracking devices such as cookies to compile data on each visitor’s browsing behavior.  Many of these providers are actually ad networks that then, in turn, use the collected information to hone their targeted advertisements to consumers.

Tracking Protection on IE9 lets users create specific tracking protection lists that will block web sites from sharing their browsing behavior data with outside entities.  The privacy feature does not, however, directly prevent sites from actually collecting data.  Users will have to choose to enable it.

The Microsoft announcement follows a report published last week by the Federal Trade Commission proposing that consumers should be allowed to quickly and easily opt out of the tracking methods that these ad networks and content providers use.

Of course, in typical DC ying/yang fashion, the Interactive Advertising Bureau responded to the report with serious concern.  The group argued that the Tracking Protection feature in IE9 may block advertisements that generate revenue for internet publishers and thus allow consumers to get more content for free.

Many experts opine that eventually, ad networks will find a way around tools like Tracking Protection, perhaps by simply separating their tracking functions from the actual ads so as to avoid being blocked. The bottom line: even with IE9’s upgrades, the battle will rage on over online privacy.

Leave us your thoughts and comments!

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Report Accuses Several Big E-commerce Names of Violating Consumer Privacy

Posted in Ecommerce, Online Sales Taxes, tagged , , , , , , on September 29, 2010 | Leave a Comment »

Our regular readers know by now that we put a lot of stock in consumer privacy and can be very critical of anyone who takes that privacy for granted.  Well rest assured, if the report that we’re covering in today’s post turns out to be valid, there’s could be serious fallout for some very big and well-known e-commerce names. (Bear with us though, because there’s more tech jargon to this story than what we usually do.)

The report in question is called “Token Attempt: The Misrepresentation of Website Privacy Policies through the Misuse of P3P Compact Policy Tokens,” and from what we can tell, it was co-authored by an associate professor at Carnegie Mellon University.

The gist: customer privacy preferences are routinely being ignored by such e-commerce outlets as Amazon, Shopzilla and Bizrate, who are exploiting a loophole in Internet Explorer’s versions 6.0, 7.0 and 8.0 to track users’ browsing habits.

The report goes on further to say that numerous sites were found where the published privacy polices do not correspond to how those sites actually interact with Internet Explorer, particularly with regard to the placement of cookies based on user’s privacy preferences.

The sites in question are apparently using invalid three and four character tokens, which are code sequences that summarize privacy policies, to circumvent an Internet Explorer user’s privacy preferences.

Here’s where it gets a little complicated.

IE is the lone major web browser that reads privacy policies that conform to the Platform for Privacy Preferences (P3P) protocol, which is designed to standardize how preferences are communicated between browsers and web sites.  Under the protocol, a web browser should immediately be able to detect and understand a site’s privacy policy for cookies.  If a site’s privacy policy, which is communicated through a series of token codes, matches up to a web user’s own privacy setting, then cookies are permitted.  Cookies are rejected when a site’s cookie usages exceeds what the user’s privacy settings allow for.

The use of P3P protocol, which was developed in 2002 by the World Wide Web Consortium as an effort at self-regulation, is voluntary except for websites owned and operated by the U.S. government.

The study asserts that the manner in which IE interprets the token code is what enables sites to bypass privacy preferences.  Administrators can use invalid codes, or fewer codes than normally required, and IE will accept them.  The loophole itself results in codes that don’t correctly communicate a site’s privacy policies properly, which then get through IE’s default privacy preferences.

“The loophole is that Internet Explorer only looks for codes that are unsatisfactory,” says Lorrie Faith Cranor, the co-author of the report.

So what does this mean in practice?  One of the sites in question could, for example, recommend an item to a shopper based on a cookie placed by an ad network that recognized the shopper once looked at an advertisement for that product on another website.  The site could read the cookie and make an unwanted outreach or product recommendation as a result.

Cranor says that while the P3P protocol may be voluntary and hasn’t been adopted broadly by other browsers, not adhering or maliciously circumventing its rules sets a bad example for the entire industry.

Complicated, right? Leave us your thoughts and comments!

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Consumer Privacy Bill Gaining Momentum in Nation’s Capital

Posted in Ecommerce, General News / Technology, Merchant Tips, tagged , , , , , , , , on May 5, 2010 | Leave a Comment »

News out of Washington, DC this week is that lawmakers are hard at work on legislation that wouldsignificantly expand consumer privacy online.  The proposed bill would definitely have ramifications for retailers and the manner in which they collect information from online shoppers.

The U.S. House Subcommittee on Communications, Technology and the Internet unveiled a discussion draft of the proposed federal legislation earlier this week.  It’s comprised of several rules, all of which would be enforceable by the Federal Trade Commission and state attorneys general, dictating how online retailers collect visitor data and employ that information in targeted advertising.

Proposed by Reps. Rick Boucher (D-Va.) and Cliff Stearns (R-Fla.), the rules would also give consumers the choice to opt out of behavioral targeting.

“Our legislation confers privacy rights on individuals, informing them of the personal information that is collected and shared about them and giving them greater control over the collection, use and sharing of that information,” said Boucher (D-VA).  “Our goal is to encourage greater levels of electronic commerce by providing to Internet users the assurance that their experience online will be more secure.”

Among the proposed rules in the new legislation:

–Companies that collect personal information about individuals must display a clear privacy policy that explains how information about individuals is collected, used and disclosed;

–Companies may collect information about individuals unless they affirmatively opt out of that data collection.  Opt-out consent also applies to those companies that rely third parties;

–Companies need an individual’s express opt-in consent to collect information about their medical records, finances, Social Security number, sexual orientation, government-issued identifiers and geographic location;

–Companies must receive full consent from an individual before sharing their information with third parties for other than operational or transactional purposes.

Privacy watchdogs and consumer rights advocates have long been lobbying Congress for this kind of action, particularly to address the behavioral targeting that many advertisers, web marketers and e-commerce sites employ.  They argue that advertisers cannot be allowed to self-regulate when it comes to privacy matters.

Nevertheless, there is a fine line in protecting consumer privacy without impeding business on the whole in an industry that generates in excess of $20 billion annually.  Boucher stressed that the legislation’s aim is not to stifle the use of advertising content and e-commerce services.

“Online advertising supports much of the commercial content, applications and services that are available on the Internet today without charge, and this legislation will not disrupt this well-established and successful business model,” he said.  “It simply extends to consumers important baseline privacy protections.”

You can expect representatives on both sides of issue to become more vocal in the coming weeks as this draft bill moves closer to being considered for law.  And we’ll keep track of it as that process unfolds. Leave us your thoughts and comments below!

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