Proposed Law Could Affect Location Based Ads

A new bill sponsored by Senator Al Franken could have implications for the burgeoning location-based advertising space. The proposed legislation – co- sponsored by fellow Democrat Senator Richard Blumenthal – would require companies to obtain express consent from users before collecting location data from their handsets, but also calls for consent before sharing that data with third parties, such as mobile ad providers.

“Current federal laws allow many of the companies that obtain location information from their customers’ cellphones and smartphones to give that information to almost anyone they please – without their customers’ consent,” the bill summary suggested.

The bill, which was introduced in the Senate on June 16, is the latest among a slew of bills proposed recently relating to online privacy. Though others have mentioned location-based data privacy, this is the first to focus on it.

If the bill is passed it could inhibit advertisers’ ability to use location information to target ads, depending largely on the ways in which developers and service providers choose to gain consent from consumers. At present, devices such as the iPhone prompt users to allow or disallow applications to access their location data, but the new bill implies more detailed information must be provided regarding how it’s being shared.

Some mobile service or property owners might choose to satisfy the requirements by gaining consent for both uses separately, while some might seek consent for both at once. For example, an app developer might ask for access to location data first to provide a service to the user, while a second choice might specifically relate to the passing of that data to third parties for purposes such as advertising.

However, the majority of providers would likely bundle the two issues in one overarching indication of consent, perhaps denying access to the service if users decide to opt out from sharing their location data with ad networks, for example.

Despite that fact, if users decide to disallow third parties to access to that data en masse, it could severely limit publishers’, developers’, service providers’ and advertisers’ ability to deliver location-relevant media and advertising.