Groupon Explains to Congress Why It Wants to Track You
Groupon has faced questions about its controversial accounting practices, and now it has to respond to questions from members of Congress about its privacy policies.
In July, the largest daily deals company sent an email to subscribers, saying it was changing the way it would use mobile location information. The same month, a congressman wrote to Groupon CEO Andrew Mason asking for more information regarding its data collection techniques, Reuters reports.
At the time, Groupon explained to users: “If you use a Groupon mobile app and you allow sharing through your device, Groupon may collect geo-location information from the device and use it for marketing deals to you.”
AllThingsD’s Kara Swisher wrote at the time: “In other words, if you let them, in order to improve the experience and make the Groupon app more useful, you’re being tracked.”
This was about the same time that Apple and Google got into hot water for tracking users on the phone, ostensibly in order to improve location-based services.
Groupon has become accountable for its actions not only because of the size of its business but also because of its announced intention to raise $750 million in a public offering.
In a response to the congressional questions, Groupon’s general counsel David Schellhase explained that the company is developing technology that will track customers’ locations, even if they don’t have the Groupon app open on their phones.
The letter was written to the co-chairmen of the House Bipartisan Privacy Caucus — Joe Barton, a Texas Republican, and Edward Markey, a Massachusetts Democrat — who made it publicly available today, according to Reuters.
Today, Groupon offers a service called Now that offers deals — based on a user’s location — that can be redeemed immediately. But in order to find the offers, you have to remember to open the app and search for discounts manually.
Schellhase argued in the letter that customers are asking for services, such as push notifications, that would make the process more automatic.
In the letter, Schellhase explained that if it were able to track a user’s location at all times, Groupon could send a notification to the phone that would appear around lunchtime and alert that person to an offer for a nearby restaurant.
“In order to choose a relevant deal for the user at the correct time, location information would need to be collected about the user just before noon, even if the Groupon mobile application is not running on the device at that time,” he explained.
Schellhase added that customers would have to sign up for the service, otherwise Groupon would not collect the data.