Spies in Your Mobile Phone

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Targeting and Tracking Teens

The complaint focuses on mobile marketers, although it also criticizes the carriers, mobile-phone companies, and software makers. BusinessWeek obtained a copy of the complaint before its release and contacted some companies named in the complaint, including Verizon, AdMob, and Acuity Mobile. Verizon declined to comment without seeing the full complaint, and Acuity Mobile didn't return a request for comment.

AdMob, a mobile ad network, was one of several companies the consumer groups flagged as the most egregious marketers. The complaint argues that AdMob gathers data and targets teens without sufficiently warning mobile users that they're being tracked and providing a way to opt out. AdMob works with about 6,000 publishers, creating profiles of users within its network by collecting demographic data and registration data.

AdMob says the groups' findings are off base. The company says its profiles don't contain personal information, such as name, address, or phone number. "AdMob takes consumer privacy and protection very seriously and our policies are consistent with industry guidelines," says Ali Diab, AdMob's vice-president of product management. "That said, we do collect anonymized data that does allow us to deliver relevant ads to consumers. That's the only reason why we collect data."

Carriers Have Lots of User Data

Carl Howe, an analyst at the research firm Yankee Group, says consumers are concerned about such marketing data because their wireless service providers already have lots of personal data about them. "People are very sensitive to the fact that telecom operators have quite a bit of information about you," Howe says. "Location is just one piece, but they also have credit history and addresses and phone numbers."

The carriers, though, are the most conservative in using data, analysts say. And while targeting is becoming more sophisticated, the amount of targeting is modest, says Andrew Frank, a Gartner (IT) analyst. "We don't have the volume [of usage] where a great deal of segmentation makes much sense," says Frank.

The CDD's Chester says that's exactly why the FTC should take a closer look at mobile targeting now. The agency was slow to pay attention to some targeted advertising practiced on the Internet, Chester says. Only in the past couple of years, through pressure from the European Union and privacy groups, have Internet companies put more stringent disclosure and data retention policies in place for behavioral and search data. "What I am saying to the commission is they have to look now and figure out what are reasonable consumer protections [for mobile advertising]," Chester says.

Green is an associate editor for BusinessWeek .