July 11, 2011, 12:05 PM

Groupon tracks mobile users’ locations—even if their apps aren’t open

That will enable Groupon to offer consumers more deals based on location.

Lead Photo

Groupon Inc. knows where mobile consumers are—even if those consumers aren’t using the daily deal sites’ mobile app at that moment, according to the company’s new privacy policies. “if you use a Groupon mobile application and your mobile device’s settings allow it, we may collect mobile location information from your device. Our application may be designed to collect information even if you are not logged into the Groupon application or the sites,” reads the newest version of company’s policy.

The daily deal operator yesterday morning sent an e-mail to subscribers alerting them that it is changing its privacy policies to enable it to collect more information. The e-mail also provided links to additional details about the data it collects and how it uses that information.

The changes, which update the company’s previous year-old privacy policy, come as the company expands the reach of its Groupon Now tool, which uses geolocation to offer deals to consumers based on their present locations.

Data collection may occur even when consumers are not logged into the Groupon application or on Groupon.com. “If the settings on your location-aware device allow us to receive location information, we will collect that automatically. If we associate location information with other personal information, this privacy statement governs how we would use that information, too,” notes the policy.

That policy is troubling, says John Simpson, director of advocacy group Consumer Watchdog's Privacy Project. "I think this is intrusive and inappropriate," he says. "It makes a mobile device a spy phone for Groupon. They can be transparent about it but that doesn't mean that it isn't a wrongheaded approach."

The approach could potentially hurt Groupon's credibility with consumers, he says. "It makes sense that if a consumer logs into the app, he agrees to participate and provide Groupon with information," says Simpson. "But 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 or others the consumer has referred to the daily deal site.

• Transaction information that details how a consumer interacts with Groupon, including what offers he views, purchases and redeems, as well how he interacts with businesses that have offers on the site.

• 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 information with merchants that offer deals 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. However, the use of your personal information by such parties is governed by the privacy policies of such parties and is not subject to our control.”

Groupon also notes that customers can control what is shared and collected by Groupon by managing their e-mail preferences and subscriptions via the My Account link on Groupon.com.

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