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LOCATION DATA SELLING THREATENS CONSUMER PRIVACY

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Selling location data collected by mobile phones has become a lucrative business, The New York Times reported Monday.

Location advertising sales are expected to reach US$21 billion this year, according to the article. At least 75 companies receive anonymous, precise location data from applications with the location services feature activated.

Several of those outfits claim to track 200 million mobile devices in the United States — about half of all devices in the country, the Times reported.

The data is very accurate, coming within a few yards of a person’s whereabouts at a point in time, and is updated often — as frequently as 14,000 times a day, the paper noted.

With that kind of accuracy and frequency, calling the data “anonymous” is a bit misleading.

“If you are collecting a person’s location over time, and it’s tied to a unique identifier, it’s disingenuous to call that anonymous,” said Natasha Duarte, a policy analyst with the Center for Democracy & Technology in Washington, D.C.

“If you have information about where people are going and where people live, you can build the story of who that location data belongs to,” she told TechNewsWorld.

Someone can learn a lot about you from your location, said French Caldwell, CFO of The Analyst Syndicate, an IT research and analysis group.

“They can tell what your interests are and who you’re meeting with,” he told TechNewsWorld. “Your location data tells more about you than your Social Security number.”

Businesses that collect consumer data typically say they’re not interested in individuals but in patterns. Data collected on individuals is “anonymized” by attaching it to an ID number. However, that ID doesn’t even have the cover of a fig leaf for anyone with access to raw location data.

Those people, who include employees or customers of the data collector, still could identify individuals without their consent, as the Times did in compiling its report.

Not surprisingly, the leaders in location-based advertising are Google and Facebook. Both companies offer mobile apps that they use to collect location data. They say they don’t sell it but use it only internally, to personalize services, sell targeted ads online, and determine if the ads lead to sales in the physical world.

Google did not respond to a request for comment for this story. Facebook, through spokesperson Jay Nancarrow, declined to comment.

Some large companies have started to get in front of the location data issue before it becomes a problem for them. For example, Verizon and AT&T announced during the summer that they would stop selling their customers’ location data to data brokers.

Deceptive Omissions

Most mobile apps request permission to use a device’s location services before accessing them, but the Times found that process could be misleading. An app might ask for location services access for one purpose but use the information for multiple purposes.

“Not all app notices are perfectly clear as to what location data is being used for,” CDT’s Duarte said.

“Often the app will ask, ‘Do you want us to use your location to provide you with local weather information, or personalize your experience, or improve the accuracy of the maps that you’re using?’ They don’t list all the other purposes the data will be used for — like advertising and sales to third parties,” she pointed out.

Some 1,400 popular applications contain code to share location information, the Times reported. About 1,200 were written for Android phones and 200 for Apple models.

In a sample of 17 apps sending precise location data, three Apple iOS programs and one Android offering mentioned that location data could be used for advertising while seeking permission to access the service, the Times found.

Creepiness Factor

Understanding what’s done with location data can be an onerous task for a consumer. It requires reading user agreements and privacy policies, and changing settings for all the apps on a phone.

“That can be incredibly time-consuming,” Duarte said. “No individual has the capacity to do that properly, and it’s not a burden we should be placing on individuals to depend on location-based services.”

How concerned are consumers about possible abuse of their location information?

“Most consumers don’t care, but there’s a creepiness factor that bothers them a little bit,” said The Analyst Syndicate’s Caldwell.

“We’ve all been on the Web and looked at a new pair of shoes or something, and all of sudden all you see in your browser for hours are ads for those things,” he continued.

“The same kind of thing is happening with your physical location,” Caldwell pointed out. “Stores are tracking your location and will start pushing suggestions to you based on where you went in that store. There’s a creepiness factor there.”

Legislation Needed

Consumers are very concerned about what’s being done with their location data, maintained Duarte.

“The problem isn’t that consumers are not concerned,” she said.

“It’s that even if you’re very concerned, it’s impossible for anyone to have the capacity and time to understand all the things companies are doing with your data, and then go into your settings and make the choices that align perfectly with your personal privacy interests,” Duarte explained.

“What really needs to happen is for our laws to recognize that location privacy in a commercial context has to be built into any service,” she suggested.

Congress should pass a commercial privacy law, “which would include limits on how companies can collect and use location information,” Duarte said.

Such a law might include provisions already adopted in Europe’s General Data Protection Regulation, which allow people to access information companies have collected about them, correct information if it’s used to make important decisions about them, and delete information.

One area where U.S. lawmakers may want to depart from the GDPR is in consent. The European rule allows data to be collected if consent is given by the owner of the data.

“Some uses of information shouldn’t be allowed even with consent,” Duarte said. “One of those uses might be repurposing of location information — collecting the information for a location-based service, then reusing it for something completely unrelated — like location-based advertising — or selling it to a data broker.”

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Mercedes-Benz sells 180,539 vehicles, January

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Mercedes-Benz delivered 180,539 vehicles to its customers worldwide in January (-6.7%).

The second-best start to a year for sales was influenced by important model changes in the high-volume SUV and compact-car segments.

In particular, the model change of the B-Class, CLA and GLE, each with a double-digit sales decrease, had a negative impact on total unit sales worldwide despite the ongoing high demand for the cars with the star insignia.

From today’s perspective, the company expects the model changes to affect deliveries in the first quarter.

With a high degree of probability, the full year will be affected also by exogenous challenges and geopolitical risks, the company announces in its global sale report for January.

A member of the Board of Management of Daimler AG responsible for Mercedes-Benz cars marketing and sales, Britta Seeger, said “With more than 180,000 vehicles delivered, Mercedes-Benz has started the year 2019 with the second-best January ever”.

“With the B-Class, the CLA and the GLE, we look forward in the coming months to the new generations of models very popular with our customers and expect the model offensive in our high-volume segments to provide significant sales impetus”.

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AMAZON ERROR ALLOWED ALEXA USER TO EAVESDROP ON ANOTHER HOME

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A user of Amazon’s Alexa voice assistant in Germany got access to more than a thousand recordings from another user because of “a human error” by the company.

The customer had asked to listen back to recordings of his own activities made by Alexa but he was also able to access 1,700 audio files from a stranger when Amazon sent him a link, German trade publication c’t reported.

“This unfortunate case was the result of a human error and an isolated single case,” an Amazon spokesman said.

The first customer had initially got no reply when he told Amazon about the access to the other recordings, the report said. The files were then deleted from the link provided by Amazon but he had already downloaded them on to his computer, added the report from c’t, part of German tech publisher Heise.

 

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CRYPTOCURRENCY INDUSTRY FACES INSURANCE HURDLE TO MAINSTREAM AMBITIONS

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Cryptocurrency exchanges and traders in Asia are struggling to insure themselves against the risk of hacks and theft, a factor they claim is deterring large fund managers from investing in a nascent market yet to be embraced by regulators.

Getting the buy-in from insurers would mark an important step in crypto industry efforts to show that it has solved the problem of storing digital assets safely following the reputational damage of a series of thefts, and allow it to attract investment from mainstream asset managers.

“Most institutionally minded crypto firms want to buy proper insurance, and in many cases, getting adequate insurance coverage is a regulatory or legal requirement,” said Henri Arslanian, PwC fintech and crypto leader for Asia.

“However, getting such coverage is almost impossible despite their best efforts.”

Many asset managers are interested in digital assets. A Greenwich Associates survey, published in September, said 72% of institutional investors who responded to the research firm believe crypto has a place in the future.

Last month, Mohamed El-Erian, Allianz’s chief economic adviser said that cryptocurrencies would gain wider acceptance as institutions began to invest in the space.

Most have held off investing so far however, citing regulatory uncertainty and a lack of faith in existing market infrastructure for storing and trading digital assets following a series of hacks, as well the plunge in prices.

The total market capitalisation of crypto currencies is currently estimated at approximately US$120bil (RM502bil) compared to over US$800bil (RM3.3tril) at its peak in January.

“Institutional investors who are interested in investing in crypto will have various requirements, including reliable custody and risk management arrangements,” said Hoi Tak Leung, a senior lawyer in Ashurst’s digital economy practice.

“Insufficient insurance coverage, particularly in a volatile industry such as crypto, will be a significant impediment to greater ‘institutionalisation’ of crypto investments.”

Regulatory uncertainty is another problem for large asset managers. While crypto currencies raise a number of concerns for regulators, including money laundering risks, few have set out clear frameworks for how cryptocurrencies should be traded, and by whom.

Insurance might allay some of the regulators’ concerns around cyber security. Hong Kong’s Securities and Futures Commission recently said it was exploring regulating crypto exchanges, and signalled that the vast majority of the virtual assets held by a regulated exchange would need insurance cover.

Custody challenge

Keeping crypto assets secure involves storing a 64 character alphanumeric private key. If the key is lost, the assets are effectively lost too.

Assets can be stored online, in so-called hot wallets, which are convenient to trade though vulnerable to being hacked, or in ‘cold’ offline storage solutions, safe from hacks, but often inconvenient to access frequently.

Over US$800mil worth of crypto currencies were stolen in the first half of this year according to data from Autonomous NEXT, a financial research firm.

Some institutions have started working to solve this problem, and may provide fierce competition to the incumbent players.

This year, Fidelity, and a group including Japanese investment bank Nomura have launched platforms that will offer custody services for digital assets.

Despite the industry’s complaints, insurers say that they do offer cover. Risk advisor Aon, received some two dozen inquiries this year from exchanges and crypto vaults seeking insurance, according to Thomas Cain, regional director, commercial risk solutions, at Aon’s Asian financial services and professions group.

“It is not difficult to insure companies that hold large amounts of crypto assets, but given the newness of the asset class and the publicity some of the crypto breaches have received, applicants need to make an effort to distinguish themselves,” Cain said.

The industry also says it is getting closer to solving the custody problem.

“This year there have been a number of developments, and some providers have developed custody solutions suitable for institutional clients’ needs,” said Tony Gravanis, managing director investments at blockchain investment firm Kenetic Capital.

“Players at the top end of the market have also been able to get insurance,” he said.

But this is not the case for all.

One cryptocurrency broker, declining to be named because of the subject’s sensitivity, said insurers struggled to understand the new technology and its implications, and that even those who were prepared to provide insurance would only offer limited cover. “We’ve not yet found an insurer who will offer coverage of a meaningful enough size to make it worthwhile,” he said. – Reuters

 

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