In response to a growing practice of tracking shoppers' movements around retail establishments, Senator Chuck Schumer (D-NY) recently called for specific federal privacy rules limiting the practice.
On July 30, Sen. Schumer called upon the Federal Trade Commission (FTC) "to require that retailers give shoppers a clear and obvious opportunity to “opt-out” before tracking them." The Marketing Research Association (MRA) has previously supported just such a move. Although MRA hasn't specified how such notice and opt out should function, Schumer "suggested the FTC require that stores send electronic notices to the phones they are about to start tracking, and give the owners of those phones a chance to opt-out."
Outrage over this kind of shopper tracking is not new. Rep. Jose Serrano (D-NY) introduced a bill in response to a marketing research mini-scandal in 2011. Path Intelligence launched a survey on Black Friday 2011 in two malls in the U.S., tracking shoppers' movements by monitoring the signals from their cell phones. It was intended to last through New Year's Day, but after intervention from Schumer, the study was stopped. The technology used antennas set up around the shopping centers to anonymously track shoppers as they moved from store to store. This kind of research has been going on in Britain for a while. Customers were notified of the survey via small signs, and the only way for them to opt out was to turn their phones off. Senator Al Franken (D-MN), Chairman of the Judiciary Committee's Subcommittee on Privacy, has also gotten involved, investigating analytics company Euclid this year for its shopper tracking technology.
“Cell phone tracking is intrusive and unsettling - it’s as if you are being followed around while shopping at the mall, with someone looking over your shoulder at every product you're considering,” said Schumer. “If you're shopping, you expect to be the one doing the reviewing, but stores are flipping that on its head, and treating the consumers as the products. If stores are going to track you footstep by footstep, you should be alerted in no uncertain terms, and be given the opportunity to decline. Personal cell phones are just that - personal. They shouldn't be used as some James Bond-like tracking device without the shopper's knowledge."
As mentioned, MRA agrees that shopper tracking poses a problem for consumer privacy and choice and that notice and opt out consent (available in some fashion other than having to turn off someone's phone's wifi function) should be expected. There are likely steps that can be taken to make the shopper tracking more transparent to consumers and ways to make the opt-out easier, such as prominent QR codes for consumers to scan with their mobile phones and notifications with one-step opt-out instructions delivered directly to consumers' cell phones.
While we would not like to see the FTC specify exactly how the mechanisms should work, the agency could presumably enforce violations of such a broad standard under its Section 5 authority to prosecute unfair or deceptive practices. Legislation, pursued by the Senate Judiciary Committee, might make better sense, as long as it does not micromanage how the notice and opt out could be delivered, in order to ensure that companies can adapt to new technological advances.
MRA is also interested to see what comes out of the Future of Privacy Forum's recently announced effort to develop best practices for retail shopper tracking.
Senator Schumer concluded his letter by noting that, "As these technologies become more widespread, it is imperative that we protect our consumers from unknowingly giving out information they do not desire to."