Privacy, Legal Concerns Raised As San Francisco Coffee Shop Scans And Tracks Cell Phones Of All Patrons

Popular Bay Area cafe Philz Coffee is tracking how often and for how long its customers visit its various locations through smartphones, tablets, and any other Wi-Fi connected devices that are inside and nearby the shop — without asking anyone’s permission to do so.

Beginning in 2012 the coffee company partnered with retail analytic firm Euclid, installing devices in their stores that detect the “pings” Wi-Fi enabled devices send out while searching for networks to connect to. The “pings” include what’s called a device’s Media Access Control (MAC) address (which is kind of like a unique device serial number) that’s used by Euclid in aggregate to provide business intelligence, in order to, they say, to improve operations.

It’s not just a business’s customers that are tracked, however: Euclid’s technology also scans devices of those passing by.

Reached by telephone Friday morning, Philz Coffee CEO Jacob Jaber told the Appeal that “We think [the Euclid devices are] a useful way for us to help deliver a better customer experience. What we’re particularly interested in is dwell time, so, for example, we can restructure the furniture in various locations to accommodate commuters or customers who camp out with their laptops.”

The collected information about customer habits is aggregated and anonymous, so Philz can’t actually look at any person’s habits individually, the CEO said.

The Appeal verified there was a small sticker informing customers of the tracking (that’s one there pictured above) in at least three locations in San Francisco.

In general, there have been an increasing number of brick and mortar businesses experimenting with the technology, according to a report by the New York Times.

Once they’re made aware of the tech, not every Philz patron is comfortable with the tactic. “The creepy thing isn’t the privacy violation, it’s how much they can infer,” Bradley Voytek, a neuroscientist who had stopped in at Philz Coffee in Berkeley, told the Times last year.

Digital civil liberty defenders the Electronic Frontier Foundation also have a problem with the retail tracking technology at Philz.

Is the "much more" your privacy?

Is the “much more” your private information?

The blame for this kind of tracking should be directed at cell phone (and other wireless device) manufacturers, for producing gadgets with “persistent unique hardware identifiers that are automatically transmitted wirelessly, in the clear, even when the user isn’t intentionally communicating using the device,” senior staff technologist Seth Schoen told the Appeal.

But, the retail analytics companies shouldn’t get a free ride either, and can “certainly be criticized for doing something creepy” because there are “legal concerns” over the means of gathering location information about US citizens, he said.

Euclid doesn’t believe it’s doing anything wrong, however. “”We’re shoppers too,” said Euclid CEO Will Smith in a prepared statement, “so we wanted to create a powerful product that helps retailers optimize the shopping experience, while at the same time could be proud of as consumers. We’ve built our technology from the ground up with privacy in the fore-front, and none of the information we collect can ever be traced back to an individual.”

However, despite Euclid’s insistence that the collected MAC addresses from devices are anonymized, Schoen said that the obfuscation technology used to do so doesn’t actually work. Schoen also posits that because of most analytics companies’ close ties to the advertising industry, there’s no financial incentive to improve the anonymization of the data.

Other security experts suggested that this type of technology has the potential for misuse in the advertising industry. “Modern advertising has a greater and greater focus on understanding purchasing habits” Morgan Marquis-Boire, a researcher from the University of Toronto told the Appeal.

“Enabled by the ubiquity of smart-devices and big data processing power, a vast amount of consumer information is being collected and analyzed in a manner and quantity previously unheard of.”

Schoen also pointed out that because Philz partners with Facebook and Cisco to set up the infrastructure in their stores, Facebook would theoretically be in a position to observe the MAC address alongside a Facebook user name — thereby establishing a correlation with a device owner’s actual identity, at least in theory.

Jaber, Philz CEO, said the theory was too technical for him and that he didn’t understand what Schoen was talking about.

If you’re not interested in being tracked, there are a few ways to opt-out of the Euclid tracking besides refusing to patronize all businesses that admit that they use the technology: Turning off a device’s WiFi altogether is one solution, albeit an obvious one. It’s also possible to opt-out of retail tracking in the US altogether by going to this website and following the instructions.

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  • withak30

    I bet there are lots of places that do this already but don’t bother to tell you.

  • Fred Condo

    There is a lot of blame to hand out on the issue of covert tracking. As the EFF says, MAC addresses in phones should be randomized. Jacob Jaber has a responsibility to know what he’s doing in his own stores. But tracking goes much deeper—the SF Appeal website has so many cookies, it could open a bakery.

    The EFF’s Privacy Badger tool, which was released just a few weeks ago, reports that there are 38 trackers on this article’s page. That’s right: 38 creepy trackers accompany an article about creepy tracking at Philz. And they’re not all benign. The Privacy Badger has already noticed that 3 of them fail to heed the Do Not Track setting. The Badger automatically blocks those. 7 others would be blocked, but provide critical functionality. And of course, just to join the discussion, I had to register with Disqus and allow their 3rd-party cookies.

  • saimin

    This is why I have my phone set to always disable WiFi when I’m away from home.

  • Sbacon1999

    The key is if this data is in aggregate, which Euclid claims. If that is truly the case, then this is no different than someone sitting in front of Philz with a clipboard and tallying how many people walk by, how many go in, how long those that go in stay, etc.

    I’m sure some company could do this via heat detection (e.g. body temp to detect a human being) but instead, Euclid is using the ping of a phone to detect a human to do their counting.

    As a retailer, this information is really critical to understanding trends, predicting peaks and valleys in business etc. But if you take it to the level of “Man A walks by, we know it’s Joe Smith, and we know Joe buys this, so we’ll offer Joe this to entice him to walk in…” – then you’re getting personal, and in my opinion, creepy. But one person’s creepy is another person’s convenient and relevant, so you could argue this both ways.

    Unfortunately it sounds like Jaber was not very well-versed on the technology or on how to talk about it in a way that isn’t creepy :(

    • Derrick

      This is the correct analogy. It’s actually more like someone sitting in front of the store and watching how many people walk down the street screaming “MY NAME IS !” which is what all WiFi devices do. The guy with the clipboard is not even recording the MACs, he’s obfuscating them and aggregating the results.

  • forizzlybear

    Jesus H. Not only are we going to make you wait too long for overpriced coffee, we’re gonna tap into your personal devices, whether you come here or not. Good god. I’ll be sure my wifi is off anytime I’m near one of these from here on out.

  • Forthright

    Didn’t really need ANOTHER reason not to go there, but will keep that in mind! Ah, silly phone rabbits! Your technology is hastening your hybridization….

  • Notes From Nowhere

    A long time ago my friend used to work at Philz on 24th st. One day they got an email announcing that the price of coffee would be going up because of gasoline costs or something. The employees were told to remind everyone that their now $3.50 cup of coffee was ‘hand currated.’ My friend asked when the price of labor would rise, since he had worked there for a year without a raise. He did not get a raise and so on his last day, he switched all of the decaf with the regular beans.

    I don’t go there much, but this really seals the deal for me. Fuck Philz.

  • sfsoma

    And people buy this over priced coffee because…

  • Luciano Fuentes

    The concerns about Euclid Analytics are certainly valid, even though in practise the methods are largely benign.

    The confusion stems from the fact that this is an “inverted” kind of surveillance. Unlike the common fears about GPS stalking (say tracking a device location across a city), MAC address tracking works by logging device activity within a known vicinity (within range of the WIFI transponder).

    Unless someone using this method has the capacity to infer identity from your device MAC address, then in practise it is less intrusive than an in-store camera recording your entry. Legitimate fears stem from the possibility that device ID’s can be matched to an identity, or merged/matched with past location data.

    Logging device MAC addresses is a practise that’s as old as WiFi. Euclid are not doing anything that would trouble a capable network administrator.