Location-Based Services and Privacy Law – Part I

Real estate lawyers have long known the prime axiom of their industry’s business success: location, location, location. Interestingly, location is also becoming important for lawyers who deal with technology matters, particularly those involving the Internet. Recently, a slew of location-based services (LBS) delivered over the Web have appeared and are now gaining serious traction (and not only with the younger generation).

While LBS provide significant benefits to users (and present corporate Canada with very important revenue generation opportunities), LBS also presents some novel and finicky legal issues, chief among them in the privacy area. This article discusses some of the business and technological aspects of LBS, while the next edition’s article will focus on the related legal questions.

The Net Knows Where You Are

People connect to the Internet in a variety of ways, including by home computer, mobile laptop, and increasingly through a hand-held phone. What is important to understand, from the perspective of LBS, is that virtually all of these devices are becoming, or are already, location-enabled. That is, simply by using the device (and sometimes even when the device is turned off), the network offering you access the Internet, and possibly others, can tell where the device is located geographically speaking.

The ability to determine geo-location through the device has been going on for some time now, but it is the degree of increasing accuracy — the ability to determine location with great precision — that is a relatively recent phenomenon. Computers hooked up to the Internet tend to have a discreet "Internet Protocol" (IP) address that would at least indicate the country of origin of the user. Today the IP address can often tell city-specific location. This was an early start for LBS, but still pretty crude.

Mobile Tracking

The big breakthrough for LBS comes with mobile devices. The location of a cellphone can typically be determined at any time by triangulating the signals emitted by the device by different proximate cell towers. Used to be, you needed two or three towers to get an accurate geo-location position; more recent technology allows a cell phone to be located with just a single tower exchanging signals with the device.

Smartphones offer even greater LBS-related potential because these devices tend to be outfitted with GPS chips. The result is that, in many countries, the smartphone user can be tracked to an accuracy of several meters at any particular time (and all the time).

As for laptops, when they have a Wi-Fi connection, they too become trackable with great precision, such as to a certain café from which they are "transmitting." Some other technologies, such as radio frequency-enabled RFID chips, can be put on a range of products or other items to follow their physical location remotely.

Stationary Multiple Image Scanning

In addition to our physical location being increasingly indicated by our personal computing and communicating devices, our location can be ascertained through hi tech image scanning. Many toll highways, or urban-traffic congestion-management systems, work by taking digital photos of licence plates of cars (an optical character reader scanner captures an image of each car passing through a particular point where the image capture equipment is set up). A similar result can be effected by electronic card readers. In both cases, however, a record is kept of when and where the person passed by the reader or image-capture equipment.

Then there is also simply the taking of millions of images through digital cameras set up on street corners, and in many other places, by law enforcement agencies, which capture images of people passing through the camera’s range. These raw image feeds can now be matched with a large database of problematic persons through visual recognition software. Again, the core result is that the users of these images can place the people in a precise place at a precise time. But link a number of these images together, in sequential order, and a fairly granular record of the person’s day is available through multiple pictures with time stamps on them. Never has surveillance been so easy and thorough.

New Location-Based Services

The various technologies that have caused portable computing and communicating devices to become location-enabled have also unleashed a torrent of LBS. Some ski resorts now track, electronically, each lift its customers take up its mountain. At the end of the day, customers can go to a website and "replay" their day by seeing exactly which runs they took, where they had lunch, what their total vertical feet of skiing was for the day, and so on. Great tool; but of course it means that the people who know this data also know a lot about your day. Maybe not so important with regard to a ski trip, but imagine the same technology deployed on your next visit to New York City. Would you want others to know that you stopped in, say, at a leading psychiatric clinic? More on this next edition.

A host of GPS-based services are coming to market. Car companies can provide roadside assistance (such as GM’s OnStar service) through a GPS-enabled device in each vehicle that subscribes to the service. One benefit this service has over merely having a cellphone is that if you’re in an accident and can’t make a call, you won’t lose precious minutes as the onboard service should be able to kick in as soon as it detects the signs of an accident.

Other GPS types of services would include bracelets for patients suffering from Alzheimer’s or similar diseases, so that they can be found quickly if they wander off. This past winter such a person in Montréal died when she wandered off into the cold; her son mused whether the tragedy would have happened if his mother had been fitted with such a device. Similarly, persons on parole might be told to wear such a device to help ensure compliance with parole conditions. These sorts of uses raise all sorts of privacy issues, however — again, more on that next month.

LBS Marketing Services

One huge growth area for LBS will be in marketing and advertising. Consider the following. In the traditional print media, a pizza ad might run in the morning paper. Useful, yes, but only partly. Remember the old adage, "You know half of this sort of advertising is wasted; you just don’t know which half." Now, move the ad spending to the Internet. The pizza company runs banner ads on websites known to be frequented by students, a good market for fast food. Not bad (and better than paper-based media), but still akin to hunting with a shotgun.

Now consider an LBS-oriented ad. As the student walks by the local pizza outlet, an electronic message comes into the student’s smartphone offering a 10% off e-coupon if he or she uses it in the next 15 minutes. Given the connection of the e-coupon with the precise mobile ad campaign, the pizza outlet can tell exactly how many of these ads worked. This is digital marketing with surgical strike precision. This is the promise of LBS.

There will be a deluge of this sort of LBS application coming to market in the next few years. Indeed, there already are a plethora of them available to users of remote computing and communication devices. For example, there is an application for the smartphone that, by knowing where you are located at any one time, can tell you (in real time) prices at various gas stations close to you. Think of similar applications for weather, traffic jams, and 101 (probably 1001) uses that can optimize your Internet experience by knowing where you are at a specific moment in time. The sky (or geography, rather) is the limit. Juniper Research figures that LBS will grow to be a $ 12.7-billion business by 2014.

Social Media and Location

Another trend involves overlaying location awareness on top of social media applications such as Facebook® and Twitter®. Check out services like Foursquare, Brightkite and Gowalla (these are just three; there are a lot of these new LBS socially oriented services). They all work in slightly different ways, but the key feature is that they enable people to keep in touch with one another by letting someone in the network of friends know where (geographically speaking) all the other friends are at any one time.

This is typically done by "checking in" online once you’ve reached, or are close, to a particular destination (perhaps the local pub on Friday night after work). By checking in, your network of friends is notified and can all gather at the same place if they wish, and so on. The services then go on to offer a bunch of related features, such as giving recommendations on things to do in that area of town, letting you know what else is on, leaving reviews of the establishment, etc.

Essentially, what these services do is cause a seamless blending of your virtual and physical world, by allowing you and your friends to stay in touch both in the online, and now also, offline worlds. This presents a wide range of advantages to those who use these services, and helps promote a rich and textured community experience. At least until one of the friends becomes a former friend, etc. (Again, more on this next edition, together with a range of other legal issues raised by LBS.)