Groupon Explains Mobile Location Plans to Congress

Groupon Inc will track customers’ location, even if users don’t have Groupon app in their phone, the company said in response to Congressional questions about policies.

Today, Groupon offers a service called Now that offers deals on a user’s location that can be redeemed immediately but to find out the offers, the user has to open the application and manually search for discounts.

Groupon’s General Counsel David Schellhase argued in a letter to the co-chairmen of the House Bi-Partisan Privacy Caucus oe Barton, a Texas Republican, and Edward Markey, a Massachusetts Democrat, that customers are asking for services that make it more automatic.

“A customer may wish to have a 'push' notification appear in her email around the noon hour to alert her that a lunch special is being offered at a nearby restaurant, Schellhase wrote in his letter.

Schellhase also said that the customers would have to sign up for the service, otherwise the company won’t collect the data.

In July the company had sent an email to its subscribers, saying that it was going to change the way it would use mobile location information.

The congressmen wrote to Groupon Chief Executive Andrew Mason asking about the company's new privacy and data collection policy.

Groupon, which filed recently for a $750 million initial public offering, collects data on customers so it can offer more appropriate bargains, increasing the chances of subscribers buying them.

Markey expressed satisfaction with Groupon’s approach.

It's appropriate that Groupon currently uses an opt-in feature for location-based services, he said in a statement on Thursday. This enables consumers to decide whether to grant permission for Groupon to pinpoint where a consumer is at any given moment so it can make offers tailored to that location.