What is Geo-fencing? And How Does it Play a Role in Data Privacy?
Geo-fencing is a new term in the digital marketing space that puts the location of the devices to work for the provision of services. The services could be push messages and notifications that a user gets when the device enters a virtual boundary, known as geo-fence. These virtual fences are set up around certain stores, stadiums, event spaces, malls, and so on.
When a user enters this space with a GPS or an RFID enabled device, it triggers an action that results in the user getting some specific promotions about the particular event or store. Certain apps and software interact with the geo-fence that is set up in the area when the device is connected to GPS, cellular data, RFID, or Wi-Fi. This results in the user getting geo-fence specific messages, which is a useful tool for marketers to promote their products and services timely. Perhaps, the user while entering the space, may not have known about a new product or a promotion, etc.
The applications of geofencing go much beyond the mere marketing push notifications. Its potential is huge and almost all industries are exploring the endless possibilities that it offers. For example, businesses with huge fleets use it to track the movement of their vehicles; the cattle industry also uses it for the same purpose. Field employees are also tracked in a similar way by certain organizations, for automatically logging time.
Similarly, pets and toddlers could also be tracked for their movement. There are instances of authorities using geofencing to track peoples’ movement when they are in COVID-19 quarantine or for lockdown violations. Geo-fences are set up around important spots like airports, or important buildings as well. This helps monitor the movement, including that of drones in the area. So, geofencing does also play a role in security to track unwanted movement within a geo-fence.
Social networking apps use geo-fencing for location-based filters, stickers, and more; prominently, Snapchat is a very good example of this. Also, in Flickr, you can limit your photo sharing with people in a certain locale only. In-store promotions and audience engagement at events are other good examples of its use. Many of the smart home appliances can also be programmed to send you reminders based on geo-fencing.
Geo-fences are used to track movement in parking spaces to understand the availability of spaces. Certain auto brands even allow you to set up geo-fences around your parked vehicle, so you get a notification if it moves out of the same. Certain people are also using it to send messages to target customers entering their competitor spaces to try and lure them. Some marketers are also offering banner ads based on geo-fencing. Most importantly, a geo-fence sending out alerts about a possible hacker in a network can be used as part of the multi-factor authentication system of an organization’s cybersecurity strategy.
Role in Data Privacy
However, there are concerns raised about data privacy in the use of geo-fencing. When you track users in a specific fence, you are collecting information about them which they may not otherwise be wanting to share. In a world where social profiles are built using digital identities, this could be dangerous. For example, a user may not want people to know why he visited a certain clinic, a religious place, a club, or an event. These could be individual preferences, which were meant to be kept private, but, the geo-fence would have collected information about this.
The legal aspect of the use of geo-fence depends on the privacy laws of the land. In Europe, user consent is a must before this service can be activated. Once specific permission is obtained, then the location-specific data being collected will come under the ambit of the GDPR, which is meant to protect the privacy of the users. Unless all the personally identifiable information is masked by the device ID and the IP addresses that are being collected, it will be treated as a violation. This is because, Personally Identifiable Information (PII) also pertains to IP targeting, email targeting, and phone number detection under the GDPR.
Even the CCPA follows these ethics for its privacy laws applicable in the state of California. And it is expected that companies across the US will be affected by the CCPA, to give consumers new rights and protection almost equal to GDPR and that includes geofencing as well.
There is also the concern that geo-fencing may cause an overdose of unwanted notifications which is a disturbance for an individual. An individual may walk into a coffee shop at the end of a morning walk every day and be bombarded with offers. Or, one may just be passing by a shop with a geo-fence and get messages as a result. This can prove to be quite annoying and may even, ultimately put the customer off. There have been a few cases in the US wherein advertising firms have had to deal with legal cases as a result of their geofencing ads. Especially when the information collected is around health care, children, religious preferences, etc., which come under sensitive personal information, the privacy concerns around geo-fencing takes on a serious turn.
Interestingly, even the banking industry is exploring options with geo-fencing to provide improved customer experiences and fraud detection. People walking into a branch are provided inputs on customized services and offers for them to be able to make better choices. Some banks have enabled their ATMs with geo-fencing, so customers are provided with information about the nearest ATM.
However, apart from the local privacy laws, individuals can control the information collected by the geofencing apps. If GPS is turned off, then geofencing cannot function, and hence, an individual’s privacy is fully protected. Some of the geofencing marketing happens with the help of the specific apps of stores, dealers, etc.
If an individual chooses not to download these apps, or check the settings in the app to opt-out of the geofencing services, then the location-specific inputs and data collection can be avoided. VPNs can be used to mask IP addresses so that no Personally Identifiable Information can be collected by the geo-fences.