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Summary:

The messy disconnect between modern technology and traditional notions of privacy is going to have to be resolved before the only winners in…

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The messy disconnect between modern technology and traditional notions of privacy is going to have to be resolved before the only winners in the debate over location-based services on mobile devices become members of the media hyperventilating about spying.

One of the biggest stories in mobile over the past two weeks has been the iPhone location mess, kicked off by a presentation by two developers highlighting a file on the iPhone that keeps a running record of one’s whereabouts. Apple (NSDQ: AAPL) compounded the problem with radio silence until Wednesday, when it published an FAQ on the topic and granted rare interviews with CEO Steve Jobs to try and control the damage.

Some of the outcry was the clearly the function of a slow news week when many were on vacation around the Easter holidays. Mobile phones with location-aware applications like maps (probably one of the most widely used apps on a modern smartphone) need to know where they are in relation to wireless networking base stations in order to function properly, and that requires those who build and maintain such phones to have a mechanism for collecting data that identifies the phone’s location.

However, there’s obviously a very legitimate wonder at what exactly these more-powerful-than-you-think computers in our pockets are recording, tracking, and transmitting in order to allow corporations to provide us with services we now deem invaluable despite having managed our lives without them quite well until three or four years ago. And it’s not just the data itself: issues around how that data is stored and how closely it can be linked to individuals can create huge problems for both privacy advocates and businesspeople plunging into the location-services game.

The simple truth is that the both the technology industry and its customers are rushing headlong into a world of mobile computing without fully understanding where the lines should be drawn when it comes to private information and modern mobile convenience. Sun co-founder Scott McNealy famously pronounced “you have zero privacy anyway, get over it,” in response to those wringing their hands over Internet privacy a decade ago. But it’s clear that mobile usage is different, invovling two opposing forces: the intense privacy attached to the use of a personal mobile device and the ubiquitous Internet.

People have no qualms about using their credit cards like dollar bills, revealing their location, brand preferences and budgets to faceless corporations thirsty for such knowledge. They type any manner of things into Google (NSDQ: GOOG) to avoid the awkwardness of having to ask a person about sensitive or risqué topics. They check into dive bars on social networks and upload pictures of slutty Halloween costumes with abandon. But discover a fairly-well hidden file on an iPhone containing a record of one’s movements, and many of those same people call their lawyers and the ACLU, in that order.

Even a truly benign explanation for behavior that appears shady can fly over the heads of most of your customers, especially when it comes to location-aware mobile computing. People have come around to the idea that Internet companies are tracking their movements around the information superhighway as to serve them advertising (even if they’re not crazy about it), but they are downright uncomfortable with the idea that companies are tracking their movements around real superhighways as to serve them advertising, or in a worst-case scenario, collect data about their movements that is subject to a warrant from government authorities.

Apple’s argument is that it wasn’t tracking you: your phone was tracking you. And your phone wasn’t really tracking you, it was tracking and recording the locations of nearby Wi-Fi hotspots and cell towers as to provide you with the most accurate and fastest location-services data as possible. In other words, Apple is asking us to believe there is a substantial difference between assembling a database of where I have traveled versus assembling a database of street corners that I have passed in my travels.

All eye-rolling aside, they do have a point regarding how location services really work. Glenn Fleishman, a wireless-networking expert and frequent writer, explained this week at Macworld how smartphones (not just the iPhone) use location signals like GPS, cell towers, and Wi-Fi hotspots to get a fix on your position, and how that experience can be made much, much faster if the phone has an established database of locations from which to draw clues.

Apple made at least two mistakes, however. It admitted that it shouldn’t have allowed the software to track your location (excuse me, the location of wireless equipment within range of your location) as comprehensively as it does, and promised to update its software to bring iOS more in line with Google’s Android, which only stores the information for about a week. And it also exposed the downside of its culture of secrecy by sitting on requests for more information for almost a week, allowing those with a vested interest in sounding the privacy alarms to dominate the news cycle.

But mobile companies who have already deployed location-based services or are thinking about doing so should be examining their approach very closely. People want applications that tell them exactly what restaurant they should visit within a three-block radius of their current location. And at the same time, they don’t want corporations knowing where they are. Even if companies embrace the full disclosure ethos, people don’t want to read the terms of service associated with an application.

This is both the beauty and the ugliness of a land rush like the mobile opportunity: established rules and procedures don’t exist, and norms have a way of shifting very quickly. This allows unbridled innovation to flourish and room for charlatans to make a score before anybody truly realized what happened.

It would be a shame if location-services app developers adopt the Internet company approach: push the privacy boundary, apologize, take a small step back (but not all the way), and repeat until we’re all 6 billion walking marketing sensors. But any sense of balance will have to involve better disclosure from vendors and more realistic expectations from consumers as to exactly how my phone knows where I am and whether or not that store on the corner is running a sale.

There are many who believe that we’ll foster a better society by sharing more and more of ourselves with our fellow humans, eliminating shame by exposing how similar we all really are. Those building location-aware services should consider that while there may be some traction to that idea, it does not yet extend to your data-mining-followed-by-targeted-marketing strategy.

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  1. Hello point to a link that Apple track you to a specific location e.g your home address or your office address. If you can’t you are barking at the wrong tree.

  2. The problem is, Apple is storing it in an unsecure file which anyone can access and view.

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