the surveillance state is built upon perversely incentivized corporate watchers

usnews | The spy in your pocket. And that doesn’t even get into the personal, portable surveillance tools practically everyone in the country voluntarily carries around with them: mobile phones and other wireless devices. Pew Research reported this week that for the first time a majority of Americans own a smart phone of some kind, while fully 91 percent of the adult population now owns some flavor of cell phone. (The wireless industry lobbying group CTIA reports that wireless devices have now reached 102 percent penetration in the U.S. and its territories, which means that the machines now outnumber the people.)

And if you’re using your mobile phone, you’re being tracked. “I don’t think people realize they’re revealing their location to their carrier just by using their device,” says Ashkan Soltani, an independent privacy researcher and consultant. A 2011 investigation by the Wall Street Journal (on which Soltani consulted) found that Apple and Android smart phones routinely send location information, including information about local Wi-Fi networks, back to Apple and Google. Separately, the Journal reported in 2011, Apple’s iPhone collected and stored location data even when users had turned off “location services” – which is to say when they thought they had opted out of being tracked.

Why? This information is a potential treasure trove for these companies. From the Journal:

Google and Apple are gathering location information as part of their race to build massive databases capable of pinpointing people’s locations via their cellphones. These databases could help them tap the $2.9 billion market for location-based services – expected to rise to $8.3 billion in 2014, according to research firm Gartner, Inc.

Google uses this information to help show on its maps where automobile traffic is especially heavy or light. Verizon sells aggregate location data to advertisers, according to Soltani, so they can know where to place billboards. The wireless companies' viewpoint, according to Soltani, is “we got this information for free, let’s use it for this other use-case, which is the marketing data.”

And there are a lot of companies trying to get a piece of this financial pie. In another story, the Journal surveyed 101 popular iPhone and Android apps and found that “56 transmitted the phone’s unique device ID to other companies without users’ awareness or consent. Forty-seven apps transmitted the phone’s location in some way. Five sent age, gender and other personal details to outsiders.” As Soltani told a Senate subcommittee in 2011, “applications can access and transmit data which includes text messages, emails, phone numbers, contacts stored and even browser history stored on the device.”

So if you woke yourself up this morning with an alarm clock app on your phone, the instant it went off, says Soltani, not only did it transmit noise to your ears but location data back to people you don't know. “There are times where there are 50 or 100 third parties – companies that you’ve never had a relationship with – who are able to monitor your … activities,” he says.

Not big on apps? Consider your next visit to the local mall. Carriers and other companies are installing sensors around shopping malls, Soltani says, allowing them to track where people are lingering, what’s popular and what’s not, analytics that then go to the mall.

Perverse incentive. All of this creates what Soltani calls a “perverse incentive that creates this worst case scenario for consumers.” Companies have an incentive to collect and keep user data; and that trove proves an irresistible target for the government in its ongoing war on terrorists.

Which brings us back to the current uproar over the NSA’s data collection and data mining. The outrage is justified, as is the broader concern about how the cult of secrecy has infected and distorted the government. But there is something somewhat comforting to the notion that government agencies are ultimately responsible to the voters, even if that process has become calcified and overly complex.

But the surveillance state is built upon its corporate counterpart. And who watches those watchers?