Recent legal and business developments have thrust geolocation privacy into the spotlight as companies seek new ways to monetize consumer data and regulators scramble to keep pace. From car manufacturers leveraging real-time driving data to insurers using precise location tracking for underwriting, geolocation data has become a competitive tool—yet one laden with risk. Below is a concise look at how federal and state regulators, industry groups, and businesses are approaching geolocation privacy, along with practical steps for navigating this evolving landscape.
1. Geolocation Data as a Competitive Tool
Hyper-Local Targeting and Monetization
- Personalized Advertising: Companies use location data to deliver ads keyed to a user’s exact whereabouts, boosting engagement and potential revenue.
- Cross-Industry Collaborations: Data brokers often repackage and sell location insights to multiple sectors, including insurance, retail, and real estate.
- Consumer Harm: Insurers increasingly factor driving behavior and location data into risk assessment, potentially raising premiums or limiting coverage.
- Secondary Uses: Data gathered for one purpose (e.g., navigation) is frequently repurposed (e.g., underwriting), sometimes without explicit user consent.
- FTC’s Changing Priorities: Under former Chair Lina Khan, the U.S. Federal Trade Commission aggressively pursued privacy violations (e.g., the GM/OnStar settlement banning sale of driver location data). Current Chair Andrew Ferguson, however, has hinted the FTC may narrow its use of Section 5 in privacy cases to instances of clear consumer injury.
- State Attorneys General: States like Texas and Arkansas are stepping up enforcement efforts, citing consumer protection laws to prosecute unauthorized data sharing. Texas’ actions against GM and Allstate/Arity highlight concerns about how location data is repurposed beyond basic services.
2. Enforcement Trends: Federal vs. State
- FTC Settlements GM/OnStar (2024): Prohibits disclosure of drivers’ location data for five years and requires explicit consent for any sale of driver data. Data Brokers: The FTC finalized multiple actions against brokers allegedly selling sensitive geolocation information without proper consumer consent.
- DOJ Rule on Cross-Border Transfers Scheduled for April 2025 implementation, restricting bulk transfers of sensitive personal data (including location) to “countries of concern.”
- Texas Attorney General’s Office Automotive Sector: Sued GM and OnStar prior to the FTC settlement, indicating states might jump in ahead of federal authorities. Insurance Industry: Filed charges against Allstate and Arity, alleging location data was used to influence underwriting decisions without consumer knowledge.
- Arkansas Attorney General Deceptive Trade Practices Act: Sued GM/OnStar for allegedly sharing location data nonconsensually, pursuing monetary and injunctive relief.
Key Insight: As the FTC signals a possible reduction in privacy enforcement, states are seizing the initiative. Companies must be aware of a growing patchwork of legal standards and state-level litigation risks.
3. Self-Regulatory Initiatives
Beyond government enforcement, industry self-regulation is an increasingly influential factor in shaping best practices:
- BBB National Programs’ Digital Advertising Accountability Program (DAAP): NFL Case: When the NFL lacked an opt-out mechanism for geolocation-based ad targeting, DAAP intervened. The league ultimately updated its privacy policy, improved transparency, and offered consumers a clear opt-out.
- Industry Frameworks: Digital Advertising Alliance (DAA) Principles: Require clear and conspicuous notice plus consent for data-driven advertising. IAB Tech Lab Accountability Platform: Provides guidance and tools to help advertisers and publishers comply with privacy regulations.
These collaborations can help companies address potential regulatory gaps and strengthen consumer trust—provided they remain committed to ongoing compliance, not just one-time fixes.
4. Best Practices for Businesses
- Ongoing, Informed Consent Move beyond a single “I agree” button at app install. Offer recurring prompts and dashboards where users can opt in or out of specific data uses (e.g., location for ads vs. navigation).
- Transparent Disclosures Explain in plain language when location data is collected and how it’s shared. If data is repurposed—say, from helping users find nearby gas stations to evaluating driver risk profiles—consumers should be clearly informed.
- Third-Party Vetting and Contracts Require data brokers, advertising partners, and analytics providers to comply with the same privacy standards and consumer controls you uphold internally.
- Risk Assessments and Governance Conduct regular privacy impact assessments, especially when introducing new features that rely on location data. Establish robust internal policies to manage cross-border transfers, ensuring compliance with the DOJ’s rule on data flows to “countries of concern.”
- Prioritize Consumer Welfare Evaluate potential harms to users—e.g., data used to increase insurance rates or track sensitive behaviors. A consumer-centric approach often aligns with regulator expectations and can mitigate litigation risks.
5. Implications for Key Stakeholders
- Businesses: Opportunity: Geolocation remains a key differentiator for hyper-personalized services. Risk: With state regulators on high alert, companies face fines, litigation, and reputational setbacks if they fail to secure and transparently manage location data.
- Consumers: Upside: Greater awareness, more choices (opt-outs, clearer policies). Downside: Persistent risk of discrimination if personal location details are used to determine rates or eligibility.
- Regulators: Patchwork Enforcement: A less aggressive FTC stance under Andrew Ferguson contrasts with robust state-level action. Global Conflicts: The DOJ cross-border rule adds another layer of complexity for international data flows, potentially clashing with EU and other international privacy regimes.
The geolocation privacy landscape is rapidly maturing as states fill enforcement gaps left by shifting federal priorities. With technology enabling ever more precise tracking—and data brokerage continuing to thrive—companies must embrace a proactive, consumer-centric approach. That means adopting transparency, meaningful consent, and robust internal controls, whether the goal is targeted advertising, risk assessment, or product innovation.
In this new regulatory era, the organizations that keep consumers’ interests front and center will be best positioned to harness the competitive advantages of location data while minimizing legal and reputational pitfalls. As Tyler Bridegan of the Texas Attorney General’s Office advises, “Businesses that put themselves in consumers’ shoes” stand to thrive in this high-stakes environment.
Disclaimer: This analysis is for informational purposes only and does not constitute legal advic.
