• by Wendy Davis  @wendyndavis, October 12, 2012

A new government report suggests that mobile companies fail to adequately explain how they collect and use information about consumers' locations.

For the report, the Government Accountability Office examined the privacy policies of 11 mobile companies, including carriers, operating system developers and app developers. While most disclosed that they collected location data, they didn't "consistently or clearly explain the purposes behind such collection or identify which third parties these data might be shared with," the report says.

Specifically, the GAO found that four of the 11 privacy policies said that companies collected "personal information," but didn't say whether that included location data.

Most of the policies also said that location data can be shared with third parties, but only some companies specified that they were referring to app developers and advertisers; the rest described third parties as "others" or "trusted businesses."

"Because companies have not made clear and consistent disclosures about how they use and share location data, consumers may be unaware which third parties are using their location data (or that third parties are using it at all)," the report says. "Users lack sufficient information to adequately judge whether they should trust those companies with their personal information."

The GAO recommended that the Federal Trade Commission consider issuing guidance about mobile location data privacy. The report also said the National Telecommunications & Information Administration -- which has been holding meetings about mobile privacy since July -- should develop goals and time frames for creating a code of conduct.

Sen. Al Franken (D-Minn.), who requested the report, said it showed that legislation is needed in this area. "This report clearly shows that mobile industry companies often fail to respect that right, giving out consumers’ location data without their knowledge or explicit consent," he stated.

Franken unveiled a bill last year that would require companies to obtain users' consent before collecting location data or sharing the information with third parties.