Today’s mobile phones can double as a GPS, a restaurant finder, a video game system or a social media hub. Those technological leaps over the past few years have brought the world to users’ fingertips, but at what cost?
The same technology also can gather detailed data profiles of users to share with outside advertisers, transmitting a user’s location, age, gender and even the phone’s contacts back to cell phone companies and third parties — all without the user’s knowledge.
Sen. Al Franken and others in Congress, alarmed at revelations that phones store such data, have called for hearings to examine whether more privacy laws are needed. On Tuesday, representatives from Apple Inc. and Google Inc. will testify.
“The basic thing is really to protect people’s right to know who’s gathering what information about them,” said Franken, chairman of the recently created Subcommittee on Privacy, Technology and the Law, which is leading the hearings.
The information gathering creates a dilemma for application makers, since the most popular mobile programs need location and other data to function properly. Pinpoint location data is what allows cell phone users to find one another on FourSquare or locate a store or restaurant through Google Maps or Yelp.
“I definitely feel like it’s a double-edged sword,” said Nic Schlueter, co-founder of app-development company Chalk. “I don’t know how to control it and allow consumers to have the flexibility and convenience they’ve come to rely on with smartphones.”
The mobile market is expanding rapidly. U.S. mobile ad revenue reached an estimated $ 550 to $ 650 million in 2010, according to the Interactive Advertising Bureau, an online advertising trade association. A Morgan Stanley report found smartphone sales will outpace sales of desktop and laptop computers combined by 2012.
Morgan Reed, executive director of the Association for Competitive Technology, an e-commerce trade association, said the user…
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