A number of analytics companies that offer technology which can track consumers via their mobile devices as they shop have agreed to a privacy code of conduct that gives consumers the opportunity to opt-out.
Tracking consumers as they walk past or enter a store or move between its aisles is as valuable as tracking them as they click through the Web. More than half a dozen companies have been developing the geo-location technology, which enables the gathering of those insights for brands and marketers.
Before the technology could really take off, Washington and privacy advocates stepped in on a code to protect consumer privacy and choice, working this summer with Euclid, iInside (a WirelessWerx company), Mexia Interactive, Solomo, Radius Networks, Brickstream, and Turnstyle Solutions to develop a privacy code of conduct.
The code calls for the display of conspicuous signage by retailers letting them know tracking technology is being used, and offering a central opt-out site for consumers.
Companies have also agreed to limit how much information is used and shared, and how long it is retained. In order to obtain personal information, companies must obtain opt-in consent. For the collection of other data, consumers must be given the opportunity to opt out. None of the information can be used for employment, health care or insurance purposes.
The code resulted from months of discussions between the companies, Sen. Chuck Schumer (D-N.Y.) and the Future of Privacy Forum's executive director Jules Polonetsky.
"This is a significant step forward in the quest for consumer privacy," said Schumer. "This agreement shows that technology companies, retailers, and consumer advocates can work together in the best interest of the consumer."
“We would like to thank Senator Schumer for his leadership on this issue,” said Will Smith, CEO of Euclid, which caught the attention of Sen. Al Franken (D-Minn.) earlier this year. "Privacy has always been a priority as we've designed and built our services, and we have been working diligently with FPF to release best practices for the retail analytics industry as a whole.”
The code is expected to be implemented within the next six months. Because the companies have agreed to the code, it can be enforced by the Federal Trade Commission.
"It's great that industry has recognized consumer concerns about invisible tracking in retail spaces and has taken a positive step forward in developing a self-regulatory code of conduct," said Jessica Rich, director of the FTC's bureau of consumer protection, whose staff provided feedback as the code was being developed. "This is a rapidly changing industry with critical consumer privacy implications, and the FTC is paying close attention how retailers are using these new technologies."