U.S. malls stop tracking shoppers' cellphones

Technology that tracks shoppers using their cellphones has been shut off at two U.S. malls over privacy concerns, a U.S. senator says.

Promenade Temecula in Southern California and Short Pump Town Center in Richmond, Va., had planned to run tests of the technology from Nov. 25 toJan.1, reported Cleveland, Ohio-based Forest City Commercial Management, which owns the two malls.

However, the malls halted implementation on the first day of the tests, said New York Senator Charles E. Schumer in a statement Monday. He took credit, saying it was because of the privacy concerns he raised. Forest City Commercial Management did not respond immediately to a request for confirmation and clarification about the status of the tests.

The cellphone tracking technology, called Footpath, is made by Path Intelligence Ltd., a Portsmouth, U.K.-based company. It uses sensors placed throughout the mall to detect signals from mobile phones and track their path around the mall. The sensors cannot gather phone numbers or other identifying data, or intercept or log data about calls or SMS messages, the company says.

'A shopper should not have to choose between the ability to be in touch with friends and family in case of emergency and safeguarding her privacy.' Charles Schumer, U.S. senator

Forest City Commercial Management said it planned to use the data gathered about shoppers' length of stay and shopping patterns to determine whether to relocate some stores, figure out what other retailers should be added, and learn what events and promotions are most effective for attracting shoppers.

Schumer wrote letters to both Jon Leibowitz, chair of the U.S. Federal Trade Commission, and Sharon Biggar, CEO of Path Intelligence, expressing his concerns about the technology.

While Forest City said it placed signs in the malls to notify customers of the tests, Schumer said he is concerned that the tracking is being done without shoppers' knowledge or consent.

He also criticized the fact that the only way shoppers could opt out was to turn off their cellphones.

"That is simply unreasonable," he said in his letter to Biggar. "A shopper should not have to choose between the ability to be in touch with friends and family in case of emergency and safeguarding her privacy."

He suggested that the information collected by Path Intelligence "could easily fall into the wrong hands" and be used to connect their movements with personally identifiable information about them.

Schumer asked Biggar to make changes to the system that would require customers to opt in before they could be tracked.

He is also calling for the Federal Trade Commission, the agency responsible for consumer protection, to analyze the technology to see how it "fits into broader U.S. privacy rules and regulations." He wants the commission to determine whether U.S. laws and policy should be updated "to address the new kinds of monitoring that innovative technologies allow."