Group wants government to scrutinize geo-targeted ads by AT&T

The government should consider protecting consumers from location-based mobile ads as part of its review of AT&T's proposed acquisition of T-Mobile, according to a letter from the Center for Digital Democracy.

The consumer advocate argues the merger would give the combined entity access to a wealth of information about users' locations and mobile browsing habits that the firm could then use to target advertisements without consumers' consent.

"By combining both the subscriber and 'mobile Web' actions of its 130 million subscribers, a combined AT&T and T-Mobile will be able to harvest and act upon deep insights gleaned from their users' behaviors, location, spending patterns, and social actions," wrote executive director Jeff Chester.

"While mobile marketing practices raise concerns from others in the industry, we believe that the specific practices of AT&T, in light of the its proposed T-Mobile deal, should be scrutinized and addressed by policymakers," Chester added, pointing to AT&T's use of geo-targeting and other location-based mobile marketing techniques.

AT&T has claimed the merger will allow it to expand next-generation mobile service to 95 percent of the country, fulfilling a major part of the Obama administration's broadband platform. Community organizations supporting the merger have argued the acquisition of T-Mobile by a larger firm is inevitable.

The combination of the nation's second-and-fourth largest wireless firms would leave Verizon Wireless in second place and Sprint Nextel a distant third. Chester also expressed concern about the cooperation between AT&T, T-Mobile and Verizon on the Isis mobile payment system, asking the government to examine the merger's impact on competition in the mobile-payment space.

The Federal Communications Commission opened a docket on the merger Thursday, indicating a review is under way with cooperation from the Department of Justice. Consumer advocates appear likely to press for conditions that would prevent AT&T from using its position as a major wireless carrier to collect data for use by third parties or marketing services.

Location-based services are another hot topic and likely to come up during the upcoming debate on privacy legislation following the introduction of privacy bills in both the House and the Senate. Some smartphone apps currently collect data on location without the user's knowledge or consent.