M-commerce: The Notion of Consumer Consent in Receiving Location-based Advertising

heightened privacy risks for consumers that must be Introduction addressed. The portability of wireless devices and the ubiquity of their applications, coupled with an ability to obile commerce (‘‘m-commerce ’’) has been pinpoint the location of wireless users and reveal it to M defined as the facilitation of monetary transacothers, could produce a system where the everyday activtions, including the purchase of products or services, ities and movements of these users are tracked and using wireless devices, like digital wireless phones or a recorded. Wireless users would receive unanticipated personal digital assistant (PDA), to access the Internet advertising messages on their wireless device, commonly using a wireless data connection or a private network. 1 referred to as ‘‘wireless spam’’, generally considered a As evidenced by the smashing success of companies like form of privacy violation. NTT DoCoMo,2 m-commerce represents a significant opportunity for companies to increase revenues, improve Even if North American and Europeans laws, regucustomer service and build their brand. However, lations and directives related to the protection of peraccording to a report from Goldman Sachs3 on the sonal data and against the proliferation of unsolicited mobile Internet, in order to capitalize on the m-commessages seem to be providing a general legal framework merce opportunity, companies need to consider m-comfor a company wishing to provide a new service such as merce as highly personalized, easy-to-use, transaction-orilocation-based advertising (the ‘‘service provider’’), these ented, and location-specific. 4 rules are in some cases vague, and are not specific to this In order to provide wireless users with content or new context. More specifically, these regulations do not advertising that is personalized and location-specific, serspecify what should constitute an appropriate and effecvice providers may use the location data of the wireless tive disclosure in order to obtain meaningful consent user’s device derived from pinpoint tracking technolofrom the wireless user agreeing to receive such messages. gies that are either network-based solutions (relying on For example, would the wireless users actually know accessing information in a carrier’s home location regthat, when consenting to advertising, they are also ister to locate the wireless device) or handset-based soluagreeing to being tracked and having their location data tions that rely on a global positioning system (‘‘GPS’’) collected and stored by a third party? where information derived from a GPS chip in the wireless device is reported to the provider over the wireless In order to obtain a valid consent from the wireless network. user, the service provider will have to make an effective Using these pinpoint tracking technologies, m-comdisclosure that covers all of the trackingand storagemerce can potentially create and target advertising related issues. Also, an analysis of the present laws, regulamessages and campaigns to a very specific consumer tions and directives, as well as the specific nature of this group or even to individual consumers, virtually anytype of service, may help determine what aspects the where, at any time, based on the geographic position of consent of the wireless user should cover in order to the wireless user. Also, localization extends personalizaprotect the user from receiving wireless spam. tion and the capture, use and analysis of the wireless user’s location data, particularly when it is cross-referThis paper is, therefore, meant to propose a solution, enced with other data sources, could most likely be a demonstrating how a service provider may obtain powerful new marketing and advertising analysis tool for informed and meaningful consent from the wireless businesses. 5 It could also enable them to customize and users prior to providing them with location-based adverpersonalize advertising for wireless users. tising. Consent would also comply with the different The development of location-based advertising, for laws and regulations regarding the protection of personal all its convenience and usefulness, introduces new and and location data as well as spam control.