As the market for location-based services (LBS) rapidly grows, so does the need for more sophistication in their design. Areas such as user interfaces, fixed/mobile integration, and viral networking capabilities are all candidates for further enhancement. But nowhere is the need for sophistication more important than in the design of LBS privacy infrastructure. There are already reports of abuse, such as estranged spouses tracking each other with location-enabled devices, or rental car agencies tracking their customers to make sure they were going were they said they were going.

Add to that the more general wireless privacy concerns among privacy advocates regarding the real or perceived abuses of the federal government and the Patriot Act, and incidents like the HP pretexting scandal, the awareness of and concern about wireless privacy has surged. In addition, the explosion of instant messaging and social networking sites such as Facebook and MySpace have already generated numerous privacy incidents even without location information. In fact, one in seven 10 to 17 year olds who use the Internet have received a sexual solicitation or approach online, according to the National Center for Missing and Exploited Children, which has helped spawn a new niche industry for monitoring kids online.

As online social interaction goes mobile and location is added to the mix, it moves the potential for abuse outside the home into areas with less physical protection and levels of oversite. Nothing would be more detrimental to LBS growth than a privacy disaster, such as a sexual predator using a mobile social networking application to find a victim. And privacy is not just a consumer issue; if LBS is going to be successful in the enterprise market, companies and LBS providers both will need to be sensitive to the privacy concerns of employees as well - no monitoring of employees outside of work hours and responsibilities is essential. In short, if LBS is truly going to be ubiquitous in the wireless world, world-class privacy protection is essential.

It is important for LBS developers to accurately gauge the type of privacy protections required for a particular application and target market. Protections that seem too loose relative to the concerns of their target customers will be perceived with alarm. On the other hand, protections that seem too stringent will be viewed with frustration, particularly if they result in a more complex and harder to use customer interface, and create unnecessary costs during the development cycle, customer signup, and ongoing operations. Privacy requirements will be based on the nature of the application and its potential for abuse. In particular they will depend on the type of interaction involved in using the application. Applications that are single user in a closed environment linked with data sources, such as hotel or restaurant finders or general navigation applications are the most straightforward, requiring primarily opt-in and spam filter protections to prevent abuse from third party providers. It is when applications start to provide person-to-person interaction with location information involved that privacy issues become more complex.

Applications that involve interaction only between family members generally need a relatively low level of privacy protection, as presumably they are the most trustworthy individuals a user can interact with (of course there are exceptions to every rule), whereas those that have the potential to interact with complete strangers need the highest level of protection. The diagram below provides a framework for developers to use in assessing these privacy requirements.

Privacy Requirements Pyramid. Source: E911-LBS Consulting. (Click for larger image.)