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Startups Changing Mobile Privacy

December 14, 2017

Consider a typical day of cell phone use. You finish your work day and have plans to see an opera performance uptown. So you call a babysitter and open a browser to an ecommerce site to purchase the last-minute tickets. On your way to the opera house, you stop by the dry cleaners to pick up your blazer for the evening. After the performance, though, while checking your phone as you relax with your partner, you notice a series of conspicuous ads appear on your phone: one advertising a babysitter website, another promoting an app for mobile ticket sales, and, surprisingly, an ad promoting an adult-themed store. As you quickly close the screen to prevent your kids from seeing this final ad, you recall that the first two ads related to your activities from earlier in the evening. Later, upon reflection, you recall that the adult store was next door to the dry cleaners, and they shared an entrance. How is it that your phone seemed to somehow “know”—albeit not necessarily with accuracy—everything you did during the evening, and then use this knowledge in a series of troublingly targeted ads?

Many of us would like to think that what we do with our phones is for our eyes only. We imagine that the various data we generate—from the GPS tracking that keeps track of where we go to the phone numbers we dial on a regular basis to browser history—is, ultimately, secure. No one’s reading our text messages. No ad companies are using GPS to spy on the daily paths we take throughout the city. Yet the reality is that there is a growing market for this data, which is bought and sold to advertisers, often at premium rates. Currently there have been few efforts to challenge this paradigm, although some telecom businesses are proposing interesting alternatives. Mobile tech companies are considering inventive ways to intervene in the relationship between users, data, and advertisers. This article tracks some of these intriguing proposals from a few of the telecom industry’s promising startups.

Some may concede that by using mobile technologies, social media, and the Internet that we, by default, exchange a portion of our privacy for that privacy. After all, the very business models of technology giants like Google and Facebook rely, fundamentally, on the selling of ads based on massive storehouses of data, which they continuously harvest from their users. And, besides, the consumer’s relatively small offering of random bits of her life details, we all use Facebook and Google for “free.” It’s par for the course, some would say.

Meanwhile, others vehemently resist such encroachments into our private lives, arguing that under no circumstances is it appropriate to appropriate the data of private citizens, especially without explicit consent. We could refer to these two positions, respectively, as anti-privacy realists and privacy advocates. And, as telecom companies like Verizon continue to actively campaign against both US national and state-level privacy regulations,(1) such debates remain perhaps as relevant as ever.

Yet a recent, and potentially important, variation upon the primary privacy positions (anti-privacy realists and privacy advocates) can be seen in proposals to make the actual harvesting of data transparent to the user. If we can’t keep our data private, at least we can know which parts of our data footprint have been acquired.

In a recent campaign for Mercedes-Benz, adtech startup Zeotap used users’ monthly bill payment information to create an ad segment that specifically targeted those with presumably higher incomes who might be able to afford a Mercedes. Zeotap is unique because it is one of only a small number of ad tech companies to work out major deals across more than one telecom carrier.(2) Through these partnerships they acquire user data from the telecom company, which they then market to advertisers who wish to leverage mobile-specific user data. Such a strategy may explain the kinds of phenomena described in this article’s introduction—which certainly present challenges for many concerned with privacy.

But not all telecom startups have resisted measures to curtail the harvesting of private data. Speaking to the recent introduction of European Union regulations that significantly curtail the kinds and amount of data private companies can collect, wearable tech startup BioBeats has actively welcomed the new EU measures. In fact, BioBeats CEO David Plans has stated that upon being approached for access to the data his company collects he has consistently rejected such requests for the sake of user privacy.(3)

Shifting from startups to telecom giants, multinational company Telefónica provides a unique approach that departs from a strict privacy vs. anti-privacy duality. Through its unique Aura platform, Telefónica offer users various incentives for allowing the company to share their data—ranging from trivial facts to potentially sensitive personal information—with third party companies. Representatives from Telefónica claim that such a system ultimately promotes “peace of mind, improved experiences or personal rewards” in exchange for user data.(4)

It remains uncertain whether either side of the conflict between privacy advocates and anti-privacy realists will ultimately emerge victorious. But what is clear is that mobile telecom companies have become significant forces in the transformation of privacy policies and practices that will continue to affect us on a daily basis. While some alternatives to the dominant data harvesting models have shown promise, only time will tell if these efforts will have long-term impact. In any case, it is important to take note of how mobile startups and telecom companies are changing, in directly perceivable ways, our relationship to privacy.

(1) https://motherboard.vice.com/en_us/article/7x4wmy/verizon-fcc-state-privacy-laws-letter

(2) http://adage.com/article/datadriven-marketing/startup-zeotap-helps-turn-telco-data-mobile-ad-dollars/304127/

(3) https://www.bloomberg.com/news/articles/2017-09-11/fitness-tracking-startups-are-sweating-due-to-eu-privacy-regulators

(4) http://adage.com/article/dataworks/startups-put-mobile-carrier-data-advertiser-hands/308198/

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