July 31, 2011, 12:00 PM

Groupon says it snoops on consumers via mobile devices

As it spreads quickly around the world, online local-deals distributor Groupon may getting too close for some people. One consumer advocacy group says it’s turning consumers’ cell phones into “spy phones” that collect information on consumers’ whereabouts even when they’re not logged onto Groupon.

Zak Stambor

Managing Editor

As it storms the world with its local deal-making site, Groupon Inc. may be getting too familiar for some.

Last month Groupon sent an e-mail alerting subscribers that it may use their mobile devices to collect personal location information, even when subscribers are not logged onto a Groupon web site or mobile app. The changes come as Groupon expands the reach of its Groupon Now tool, which uses geolocation to offer deals to consumers based on their present locations.

Some consumer watchdogs are crying foul. "It makes a mobile device a spy phone for Groupon," says John Simpson, director of advocacy group Consumer Watchdog's Privacy Project. "The consumer should have the ability to not be tracked when they close the app and don't want to be tracked."

Groupon says it collects the following types of personal information:

  • Contact information, such as a consumer's name, postal addresses, e-mail addresses, social media account names and telephone numbers.
  • Relationship information, including to whom a consumer has given a Groupon voucher as a gift, who has given a consumer a Groupon voucher, and information about friends who referred the consumer to Groupon.
  • Transaction information that details how a consumer interacts with Groupon, including what offers he views, purchases and redeems.
  • Financial information, such as a consumer's credit or debit card number, expiration date, and card verification number.
  • Mobile location information, including where a consumer is located.

Groupon also says it shares subscribers' information with merchants to enable them to communicate with, and advertise to, customers. However, Groupon notes, "We encourage Groupon merchants and business partners to adopt and post privacy policies."

zak@verticalwebmedia.com

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