Data Snooping Gets Apple in Trouble

Apple (NASDAQ:AAPL) has been hauled up by German data regulator, Bavarian State Authority for Data Protection, regarding privacy concerns arising out of the mobile phone software, Carrier IQ, which tracks customer usage.

Thomas Kranig, head of the data regulator said, “We read in the press about the privacy concerns the software may pose and decided to ask Apple about the details. If Apple decided to cease the use, all the better.”

Kranig’s concerns were echoed yesterday by U.S. Senator, Al Franken, who called upon Carrier IQ’s developers to be more upfront about what the product does and whether data is passed on to other parties. Apple isn’t the only company on the hot seat. Handset manufacturers HTC and Samsung have also been named as defendants in one lawsuit each. Moreover, AT&T (NYSE:T) and Sprint (NYSE:S) have been asked to answer questions for Congress.

Fears that the software logs sensitive phone-user information were sought to be allayed by Apple yesterday, saying in an e-mail that “We stopped supporting Carrier IQ with iOS 5 in most of our products and will remove it completely in a future software update. With any diagnostic data sent to Apple, customers must actively opt-in to share this information, and if they do, the data is sent in an anonymous and encrypted form and does not include any personal information.”

Telecom carriers, however, clarified that the software, though it runs in the background and does log user activity, is useful to improve service performance.