Surprise! Your GPS Device (Probably) Isn't Spying On You

You’re driving around town. Right as you approach a McDonald’s, an advertisement appears on your car’s GPS device, giving you a coupon for a Big Mac. But the coupon isn’t coming from just any Mickey D’s. It’s good only at the McDonald’s you just passed.

Creepy? Maybe. Proof that McDonald’s and your GPS device are secretly spying on you?

Surprisingly, no.

It’s surprising because lately it seems everybody wants to know where you are, all the time. Apple recently landed in the middle of a mid-sized controversy when independent tech experts discovered that iPhones and iPads secretly record their users’ movements. Frustration over companies secretly tracking consumers’ travels across the Internet prompted two senators to introduce competing legislation in recent weeks to create a “Do Not Track” registry for online advertisers, similar to the “Do Not Call” list for telemarketers.

“This is definitely a growing industry,” says Joe Paiva, a GPS consultant. “There’s a whole portion of the economy that’s trying to develop new location-based services.”

Companies that sell car-based GPS devices have been telling us where we are since the early ’90s. Why wouldn’t they use that information to deliver us ads or other services, especially now that their entire business model is threatened by the spread of map-equipped smartphones?

“There’s no logical reason why they wouldn’t,” said Justin Brookman, director of consumer privacy at the Center for Democracy & Technology.

They don’t do it for one simple reason: In most cases, they can’t.

“For them to collect that data, they need two-way communication,” Paiva says. “They don’t have that. They only have one-way communication.”

[Related Article: Is Your iPhone App Violating Your Privacy?]

A GPS Primer

GPS stands for Global Positioning System. Developed by the U.S. Department of Defense in the 1970s and ’80s, the service operates a network of satellites that constantly send signals to devices on the ground, telling those devices their latitude, longitude and altitude. In car-based systems, that information is layered atop digital street maps.

Those messages are all coming from the satellites — by themselves, the devices cannot communicate back.

“The GPS device in your car is just a receiver. It doesn’t transmit anything,” says Mohinder Grewal, professor of electrical engineering  at California State University, Fullerton.

OK, So How Am I Getting All These Ads?

The ads that appear on some GPS machines don’t use anything as sophisticated as satellite beams to deliver you ads. Instead they use a more primitive technology: radio. The companies that deliver ads to their GPS devices do it by erecting transmitters on towers and buildings. The transmitters send the ads out as radio wave signals.

And just like an old-fashioned radio or television station, the GPS companies have no idea whether anyone is actually receiving the signal. Any radio-GPS equipped device that wanders into the tower’s transmitting radius will receive the same ad. That’s why most GPS-based ads come in the form of coupons, which require drivers to present a code in order to redeem them. The code is the advertiser’s only way to know whether anyone is actually getting its message.

Magellan has introduced radio-based ads to its system to help pay a third-party vendor for enhanced traffic reporting on its devices, says Bill Strand, the company’s senior product marketing manager for automotive navigation. That replaced a subscription model, where previously customers had to pay $24 a month for the traffic feature.

“Although people don’t like those little banner ads going across the screen, we have found that is a lot less annoying than paying a subscription fee every month,” Strand says.

Magellan’s service is currently available in most major cities and some mid-sized ones in the U.S., but not in small towns or rural areas. That’s because the system requires a certain density of users to make the ads cover the cost. And even with its limited rollout so far, the program is far from an unqualified success.

“It started off very slowly,” says Strand. “We don’t get too many ads, but as it becomes more successful I think we’ll get more.”

Garmin offers a similar service, with similar protections for consumer privacy.

“We do not provide the data we collect from our users to anyone other than our traffic providers,” says Ted Gartner, a company spokesman. “When we provide this probe data to our traffic providers, it is still anonymous, meaning they can’t trace it back to any device or customer.”

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Some Exceptions »

Image: Francis Storr, via Flickr.com