Apple, Google to face lawmakers in privacy tussle

Sun May 8, 2011 12:42pm EDT
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By Diane Bartz

WASHINGTON (Reuters) - Tech companies such as Apple and Google are hoping the tracks of millions of mobile device users will lead to billions of dollars in revenue.

But where they see dollar signs, lawmakers see red flags.

The revelation last month that Apple's iPhones collected location data and stored it for up to a year -- even when location software was supposedly turned off -- has prompted renewed scrutiny of the nexus between location and privacy.

On Tuesday, senior Apple and Google executives will submit to questions from a congressional panel on how location-tracking may violate users' rights.

Smartphone and advertising companies argue that they use data on what users like (which they know because users use the phone to check prices); where they are (which they know because of contact with cell phone towers); and who their friends are (which they know from social media like Facebook) to give their customers ads for products they are most likely to buy.

"There are terrific things about mobility. There's a lot of good stuff that can come out of this," said Joseph Turow, who follows marketing for the University of Pennsylvania's Annenberg School for Communication.

Companies capable of delivering advertisements to the right consumers in a mobile format could make big money.

"What's the implications of the data in terms of revenues? The issue is in one word -- huge. We think that by the 2014 time frame or so it will be well north of $3 billion," said Carter Lusher, an analyst with research firm Ovum.   Continued...

<p>An Apple staff demonstrates a new Verizon iPhone 4 at Verizon's iPhone 4 launch event in New York January 11, 2011. REUTERS/Brendan McDermid</p>