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I Spy Services turn off consumers: Location based privacy services to be handled with care

The privacy debate rages on. The dark, faceless forces of ‘technology’ stand accused of invading our personal spheres, snooping, spying and exploiting consumers.

The backlash could be devastating for technology companies that handle highly sensitive personal data, in particular, providers of location-based services (LBS)  – applications and websites that provide services or information based on your current location. This includes apps/websites that let you find the nearest cashpoint, automatically show your local weather forecast, and allow you to ‘check-in’ at that new wine bar.

Following the rise of smartphones, this emerging market has the potential to transform the way we interact with our surroundings. However, it also provides companies with a robust history of an individual’s movements which, when combined with other personal data, builds a disturbingly detailed consumer profile.

In the light of various privacy leaks, consumers are becoming wary about collection and abuse of their personal details and location privacy. Fears about increasing intrusion from e-behemoths such as Google and Facebook has made consumers sceptical and even cynical. In this competitive market, businesses need to act now in order to build consumer trust in LBS or risk alienating both existing and potential users. Mechanisms to safeguard consumer privacy will ensure users feel comfortable and enhance brand loyalty.

While the law catches up with technology, businesses have the opportunity to stand out from the tech crowd and empower consumers to take control of their own personal data and location information. A clear, strongly worded privacy policy and the use of privacy-enhancing technologies such as anonymisation and encryption will address consumer concern and avoid negative publicity. Companies need to balance consumer trust against data mining and conclude that the commercial value of establishing robust privacy protection is paramount to a sustainable business model.

This alert was written by Simon Halberstam (partner) at SIMONS MUIRHEAD & BURTON LLP. If you need assistance, please contact Simon Halberstam on 020 3206 2781 or [email protected]