Apple and Google Testify in Senate About Location Tracking System

Apple (AAPL) and Google (GOOG) testified this week in front of the  Senate Judiciary Subcommittee on Privacy, Technology and the Law.  The purpose of the hearing was to to address users’ privacy on smartphones, tablets, and cell phones, and to get answers from Google and Apple about how and why they record various aspects of consumer data. Representatives from Apple and Google faced tough questions at they tried to defend their  their location tracking system and privacy policies.

The hearing was called by Senator Al Franken (D-MN) in April following the location tracking controversy that first exploded over Apple’s products and Google soon thereafter. Apple VP of Software Technology Guy “Bud” Tribble and Google Director of Public Policy Alan Davidson both stood behind their companies’ policies at the hearing, while continuing to insist that they take consumer privacy seriously.

“Each year, over 26,000 adults are stalked using a GPS tracking system, including GPS tracking devices on mobile phones. This is from 2006 when there were a third as many smartphones as there are today,” Franken said at the beginning of the hearing. “The answer to this problem is not ending location-based services. No one up here wants to stop Apple or Google from producing their products or doing the incredible things that you do. What today is about is trying to find a balance between all those wonderful benefits and the public’s right to privacy.”

Tribble repeated many of Apple’s statements from late April when the company finally addressed users’ location tracking concerns—he reiterated that the company collects information on cell towers and WiFi hotspots in order to help get a lock on GPS more quickly when people are using iOS location services. He also repeated the careful semantics dance over the fact that Apple only collects location information for those hotspots and not the user’s iPhone itself; a response that was met with frustration from Franken.

“Steve Jobs said to the press that ‘we build a database of cell tower hotspots that could be 100 miles away from where you are, those are not telling you anything about your location.’ Yet in a written statement, Apple explained that the very same data would help your iPhone calculate its location. How can those two statements be true at the same time? Does this data indicate anything about your location or doesn’t it?” Franken shot back.

“The data that’s stored in the database is the location of many WiFi hotspots and cell phone towers as we can have. That data does not actually contain any customer information at all; it’s completely anonymous. It’s only about the cell towers and WiFi hotspots,” Tribble said. “When a portion of that database is downloaded onto your phone, your phone also knows which hotspots and cell phone towers it can receive right now. So a combination of the database and your phone knowing what it can receive right now is how the phone figures out where it is without the GPS.”

So, are these companies really tracking you? Well, sort of. Companies that design smartphone operating systems like Apple, Google, Research In Motion, Microsoft and Nokia all collect data about your location that, the companies say, is kept anonymous and can’t be traced back to you.

The information that’s collected is uploaded to massive databases maintained by the companies. A very small part is stored on your phone. The information tracked is actually not your specific locations, but rather the locations of the Wi-Fi network routers and cell towers around you.

What exactly are the companies doing with your data? The information is used for two reasons: To provide a way to locate you if GPS is unavailable, and to more quickly locate a GPS signal when one is around. That information is crucial for maps and many other smartphone apps.

Your phone consults the massive databases, and, based on the Wi-Fi networks and towers surrounding your phone, Apple (AAPL, Fortune 500), Google and others can very quickly approximate your location.

“It works like this: Your phone says, ‘Oh, you’re near these eight routers and those three cell towers? This is where you should be,'” explained Charles Golvin, analyst at Forrester Research.

The advantage is that discovering your location based on surrounding networks is very fast. The disadvantage is that it’s imprecise. GPS has the exact opposite problem: It’s super-precise but can take several minutes to discover your location.

By approximating your location using Wi-Fi and cell networks, your phone can know what part of the sky to search for when it’s looking for GPS satellites, significantly speeding up that process.