Fin - Daily Ticker - US

Your Smartphone Knows Where You Are — And It’s Telling Companies

The U.S. has launched a criminal investigation into privacy violations by companies that make smartphone apps, the FT reported earlier this week.

Among the companies subpoenaed was Internet music pioneer Pandora, which recently filed to go public.

The details are sketchy at this point. Privacy advocates have said that some apps that run on Android phones and Apple iPhones use a lot more information about users than the companies that make the apps say they do. But it's not clear what the government is suspicious about.

Pandora was subpoenaed by a federal grand jury, which is usually convened when the government is close to filing charges. Pandora says the subpoena is part of an "industry-wide" probe and that Pandora is not a specific target of the investigation.

Until it is clear what the government's concerns about Pandora are (if any), the investigation will likely weigh on the company's IPO prospects.

The proliferation of smartphones has created the ability for companies (and the government) to know where people are at any given time, as well as who they are communicating with and what they are doing. Regardless of the scope of this particular investigation, the use of smartphone data is likely to be an area of high interest to regulators, privacy advocates, and litigators for the next few years.

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