Groupon Sells Coupon Tracking Plans to Congress


Groupon general counsel David Schellhase answered Congressional questions concerning his firm. He even disclosed some details of its plan to offer location-based tracking through mobile devices. The disclosure occurred when the largest daily deal company replied on Thursday to questions about its privacy policies.

The daily deal company is researching and developing technology that will track users’ location, even if their Groupon app is not open on their mobile devices.

In a letter dated August 10 to the co-chairmen of the House Bi-Partisan Privacy Caucus, Joe Barton, a Texas Republican, and Edward Markey, a Massachusetts Democrat. Schellhase wrote “Groupon currently does not access location data when the Groupon mobile application is not running. However, our customers are asking for services that require this functionality.”

By the virtue of offering customers more suitable bargains, Groupon collects data on users, so subscribers will buy the deals that they want.

Similar daily deal companies like LivingSocial are offering more instant deals based on location information. It is a very lucrative and a new aspect to the daily deal business. However, and rightly so, the tracking method has intensified the concern about privacy.

“A customer may wish to have a ‘push’ notification appear in her email around the noon hour to alert her that a lunch special is being offered at a nearby restaurant,” Schellhase also wrote in his letter. “In order to choose a relevant deal for the user at the correct time, location information would need to be collected about the user just before noon, even if the Groupon mobile application is not running on the device at that time. We are working to provide this type of functionality in the future.”

The chief concern on whether of not Groupon receives approval for moving in the direction of location-based tracking is that users must “explicitly consent” to Groupon, otherwise the company won’t collect the data, according to Shellhase.

I just hope the user, who opts into the tracking system, understands the privacy they will be handing over. Sure, it’s a nice service to have local deals promoted to you via the mobile device, but users will be giving up some of their privacy. I am also curious what Groupon will do with the data besides improve their overall daily deals.

How does Congress feel about location-based tracking? Congressman Markey articulated satisfaction with Groupon’s approach.

“It’s appropriate that Groupon currently uses an opt-in feature for location-based services,” he said in a statement on Thursday. “This enables consumers to decide whether to grant permission for Groupon to pinpoint where a consumer is at any given moment so it can make offers tailored to that location.”

Basically, it’s up to the users to decide whether or not they feel their privacy is being encroached upon when Groupon asks if they want to be tracked by the daily deal company in order to get the best bargains at the right location. The issue is definitely something to ponder over.