Apple Gathers Location Data With iAd Opt-Out

Apple has updated its iTunes privacy policy to let users opt out of its iAd platform, which launches 1 July to help iPhone and iPad developers make money from the 225,000 applications they’ve already lodged in Apple’s App Store.

Timed for the launch of the vaunted iPhone 4, iAd lets developers insert advertisements within their applications.

Developers keep 60 percent of the proceeds from ads shown; Apple gets the remaining 40 percent of sales. iAd is Apple’s plan to challenge Google, Yahoo, Microsoft and other internet companies in the market for mobile ads delivered on smartphones and tablet computers.

The updated privacy section, which eWEEK learned of through AllThingsDigital (ATD) via iLounge, stated: “Apple and its partners use cookies and other technologies in mobile advertising services to control the number of times you see a given ad, deliver ads that relate to your interests, and measure the effectiveness of ad campaigns. If you do not want to receive ads with this level of relevance on your mobile device, you can opt out by accessing the following link on your device: http://oo.apple.com.

Privacy policy update includes opt-out details

“If you opt out, you will continue to receive the same number of mobile ads, but they may be less relevant because they will not be based on your interests. You may still see ads related to the content on a web page or in an application or based on other non-personal information. This opt-out applies only to Apple advertising services and does not affect interest-based advertising from other advertising networks.”

ATD noted that Apple’s privacy approach for iAd is akin to policies from Google and Yahoo, which also let users opt out of seeing targeted advertising, but not ads entirely.

Interestingly, while users can run from the interest-based ads, they can’t avoid the location-based tracking Apple is using for its iPhone, iPads and computers.

As the Los Angeles Times blog noted, Apple’s updated privacy policy will not let users download any applications from the iTunes store without agreeing to the new terms and conditions. These include: “To provide location-based services on Apple products, Apple and our partners and licensees may collect, use, and share precise location data, including the real-time geographic location of your Apple computer or device… For example, we may share geographic location with application providers when you opt in to their location services.”

Of some consolation to privacy-wary users is that Apple claims the the location data it collects is done so anonymously in a form that does not personally identify users. However, Apple added that its MobileMe “Find My iPhone” feature requires users’ personal information for the feature to work.

Location-based services are becoming increasingly popular on Twitter and services such as Google Latitude and Google Buzz. And don’t forget the ultimate check-in services of Foursquare and Gowalla.

The smart bet says Apple device users will be okay with the location-based services Apple offers, so long as these services improve the user experience for applications on the iPhone and iPad.