Apple and Google on Collision Course With Congress Over Privacy

Congress appears to be on a collision course with Apple (AAPL) and Google (GOOG) over their ability to track individual customers and transmit that data to advertisers, sometimes without permission.

Senator Al Franken wrote to Apple yesterday to ask why the company's iPhone was "secretly compiling its customers location data ... sometimes logging their precise geo-location up to 100 times a day." Apple has also been sued for allegedly allowing app developers to collect individual data from iPhones and sell it to advertisers without users' permission. Last week, senators John Kerry and John McCain proposed a law that would create a privacy bill of rights for consumers that would regulate digital advertisers.

It's not just Apple that collects data on its users, often without their knowledge:

Google is preparing "behaviorally targeted" ads across its Android mobile system, including the ability to track customer conversions from their phones.
Google's Chrome browser does not have a "do not track" function, and the company has patented a new technology allowing advertisers to follow users based on on their interests.
And federal prosecutors are investigating Pandora for the "Orwellian" amount of data it collects in its users.

The conflict between the Senate and the digital advertising business can be seen as a generational one.

Those who are old enough -- i.e. Franken, Kerry and McCain -- mourn the days before the Internet when privacy was a real, actual thing. Younger generations don't know what they've lost, and mostly don't care. Here's a survey showing that 50 percent of consumers want to see mobile phone advertising that is based on their location.

The companies may protest that consumers can opt out of tracking if they're willing to futz around with their system settings or download obscure apps. But they know that ultimately consumers will submit to the demands of Apple, Google and Pandora's advertisers because their phones won't work properly unless they agree to be tracked.

The best we may be able to hope for is to trade privacy for its poorer cousin, anonymity.

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Image by Flickr user rpongsaj, CC.

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