Subscribe to Entrepreneur for $5

Privacy of Location-Based Services on FCC's Radar

Opinions expressed by Entrepreneur contributors are their own.

FCC Tracking Privacy Issues Behind Location-Based Services

It was bound to happen. With approximately 30 percent of U.S. adults now using a location-based service via their mobile phone, tablet or automobile, it was only a matter of time before the Federal Communications Commission stepped in and began looking into the myriad of privacy issues raised by the use of such services.

From Foursquare, Twitter and Facebook to GPS-navigation systems in cars, location-based services are no longer talked about in the realm of "someday." They're already here and their use is expected to grow by leaps and bounds. The sale of geo-targeted advertising alone is expected to generate more than $100 billion by 2020, according to the McKinsey Global Institute.

The FCC's concern is that users of location-based services be allowed to reap the benefits, all the while being assured that their privacy is being protected. And while it recognizes that industry is moving toward minimizing privacy concerns, the government still intends to monitor the space closely.

Related: Facebook Exchange Ads Could Raise Even More Privacy Concerns

In a May 2012 report titled Location-Based Services: An Overview Of Opportunities And Other Considerations, the Commission's Wireless Telecommunications Bureau concludes that a host of issues need to be considered, including:

  • Privacy considerations: How do you effectively ensure the product design of location-based apps includes security for users? How does the location-based services industry relate that information to the consumer?

  • Data security: What are the obligations of those who hold data gathered from such location-based services? What assurances are there that the information doesn't fall into unauthorized hands?

  • Notice to users and time limitations: Should the user receive information each time an app or service is used? Should there be an opt-out if the user objects to use of his or her information?

  • Data limitations: Should developers of such apps collect the bare minimum of data required to provide a location-based service? Should they retain that data for the least time necessary?

The FCC is just getting started in all of this. If your company is working with third-party solution providers to offer location-based promotions, ask your provider if they're aware of the FCC report and what they're doing about it. And consider consulting with your own lawyer to ensure you and your brand aren't doing anything that could come back to haunt you later on.

Related: A Seven-Step Guide to Protecting Customer Privacy

Entrepreneur Editors' Picks