Mall owners pull plug on cellular tracking, for now

You may now shop two malls again without fear of individualized tracking—at least by your cell phone signal. Privacy concerns raised by US Senator Charles Schumer (D-NY) have ended plans by malls in southern California and Virginia to "survey" customers' shopping habits by tracking their cell phone signals.

As Ars Technica reported last Friday, Forest City, the mall developer that owns and operates the Promenade Temecula in Temecula, California and Short Pump Town Center in Richmond, Virginia had announced it would test technology in those two malls from Path Intelligence. Called Footpath, the system uses a series of cellular signal detectors to triangulate the movement of customers' phones—and by extension, the customers themselves—through the mall's stores and other spaces. While the technology doesn't eavesdrop on cell phone users' calls or record information about their phone numbers, it does use their cellular device's digital signature to track individuals.

The collected information is stored on Path Intelligence's servers, and made available through a secure Web portal to mall owners, providing them with a way of profiling which stores customers visit and where foot traffic "hot spots" are for those demographics to optimize display advertising and other marketing.

Forest City had planned to conduct the trial until the end of December. However, just a day after the trial began, Sen. Schumer contacted Forest City to raise his concerns. In a press conference on Sunday, Schumer said that the malls should have allowed customers to opt into the survey, rather than having to "opt out" by turning off their cell phones. "A shopper's personal cell phone should not be used by a third party as a tracking device by retailers," Schumer said in a press conference on Sunday. "Personal cell phones are just that—personal. If retailers want to tap into your phone to see what your shopping patterns are, they can ask you for your permission to do so."

Schumer also sent a letter to Federal Trade Commission chairman Jon Leibowitz asking the FTC to look into whether Path's technology was legal in the US.

Forest City has not abandoned plans for the survey, however. In a statement, a Forest City spokesperson said that the company was suspending the trial until it came up with a way for customers to opt out easily. Path Intelligence CEO Sharon Biggar told CNNMoney that she hopes to discuss her company's technology with Schumer directly, and that it was fundamentally no different from the type of tracking that online retailers do with "cookies" and other behavioral marketing tools. "We are simply seeking to level the playing field for offline retailers," she said.