Most of us know cookies are tracking our online behavior for advertising purposes, but a company specializing in retail analytics called Euclid, Inc. is moving that concept into real world shopping experiences — and Sen. Al Franken (D-MN) has some questions about their practices.
Euclid’s newest product Euclid Zero, launched in January, uses open WiFi access points to track shopper behavior across stores: It does this by collecting the MAC address of smart phones as they passively connect to open networks while people shop, anonymizing the data, putting it into a giant database that then recognizes the device when it goes near any other Euclid customer’s network and then gives the data to the retailers essentially in the form of a human Google Analytics browser.
Euclid doesn’t disclose who their clients are online (although they claim “Top 100 retailers in numerous categories, including specialty apparel, department stores, auto parts and home improvement” as clients), and the only notice consumers get is a vague sign hidden somewhere in the physical store, meaning consumer data is collected largely without their knowledge or consent. And while the MAC data is relatively anonymous, it’s also a unique ID — and the only way to opt out is giving Euclid your MAC address, thus identifying yourself.
Euclid raised $17 million in venture funds earlier this year and have information on over 50 million mobile devices right now. Considering that there are 114 million people in the U.S. using smart phones, that’s a pretty large segment of the consumer audience — large enough to garner interest from at least one senator: In a statement yesterday, Franken expressed concerned about the privacy implications of the system:
“It’s one thing to track someone’s shopping habits through a loyalty card or credit card purchase; folks understand that their information may be collected. It’s another thing entirely to track consumers’ movements without their permission as they shop, especially when someone doesn’t buy anything or even enter a store. People have a fundamental right to privacy, and I think neglecting to ask consumers for their permission to track them violates that right.”
The statement was released in conjunction with a letter Franken sent to Euclid’s CEO inquiring about their business practices. The letter includes a laundry list of important questions ranging from law enforcement access to data (with or without warrants?) and how data is being secured in the cloud down to if users are being tracked without even entering stores and how demographic data is being inferred based on smart phone data that provides a good summary of the most pressing privacy concerns — read the full thing here.