By MARK GUARINO Music Writer | Chicago Sun-Times
July 8, 2013 4:50PM
Jay-Z fans who downloaded his new album via a special app on Samsung smartphones got more than they expected: software that invades their privacy.
Digital rights advocates say that Samsung embedded downloads of “Magna Carta … Holy Grail,” the 12th studio album by Jay-Z, with software that collects information such as the user’s phone number, commonly dialed numbers, and email, social media and GPS data, among other encroachments. The app also allows only streaming not downloading of tracks. The album receives its conventional release today.
The app is the result of a $5 million partnership between Jay-Z and Samsung to promote the technology giant’s Galaxy brand of smartphones. Users were allowed for three days to access the album for free ahead of its release date. Before Samsung patrons could stream the tracks, however, they had to sign off on a user agreement.
“The fundamental issue is proper disclosure,” says Corynne McSherry, intellectual property director of the Electronic Frontier Foundation, a consumer advocacy group based in San Francisco. “We all know majority of people do not look carefully at agreements they sign off on, so even though there may be a kind of disclosure, is it a meaningful disclosure? That’s the fundamental problem.”
A representative for Jay-Z did not reply to a request for comment.
For marketers, drilling deeply into user information is big business. According to eMarketer, the mobile advertising market will reach $7.65 billion this year, up 75 percent from $4.36 billion in 2012. As advertisers rely more on mobile advertising to reach consumers, customized data will become more valuable. That’s why mobile companies and social network operators are increasingly creating new opportunities for themselves to mine data that tracks how, where and why consumers operate in the online realm.
Earlier this year, Facebook was criticized for launching a branded mobile platform that was designed to solicit personal information. Two years earlier, the Federal Trade Commission reached a settlement with Facebook over charges that it allowed advertisers to cull personal information without users’ permission; as a result, the company will undergo privacy audits for the next two decades.
Similarly, in 2006, SonyBMG (now Sony Music) agreed to a class-action settlement for selling more than 20 million CDs embedded with software that, once installed on a personal computer, created security issues and transmitted user data to a data-mining company.
Despite such high-profile cases, spyware continues to exist as a viable option for marketers. One reason is that the multiple operators involved in the practice — mobile phone companies, telecommunications operators, record companies, social networks, etc. — make it extremely difficult to regulate, says Chenxi Wang, vice president of market insight for McAfee, a security technology company based in Santa Clara, Calif. Wang thinks the industry needs to establish guidelines that would make it clear to consumers what they are signing up for when downloading apps or other software to their personal devices“The privacy community has proposed this framework in the past, but it hasn’t percolated to regulation,” she says. “It’s very difficult for regulators unless there’s a really egregious violation. This has to be done, but I’m not hopeful it’ll happen anytime soon.”
McSherry says that increasing public awareness is key to creating pushback to companies that are becoming more adept in mining their data.
“Taking away people’s right to listen to music anonymously, and essentially having their phones hijacked just because they want to listen to music, will result in consumers complaining more, which they should do,” she says. “They’re going to ask, ‘How badly do I want to listen to “Magna Carta” and do I want to pay this price’?”
For Jay-Z, the Samsung partnership was designed to give him boasting rights. The Recording Industry Association of America, the trade group representing the recording industry, announced last week that it would update its policies to allow digital album certification requirements on the day of release, instead of following the usual 30-day waiting period applicable to physical releases. The change allows Jay-Z to claim that he sold 1 million copies of “Magna Carta” by the release date, which automatically gives the disc platinum status.
Billboard magazine, however, refused to acknowledge the giveaway as counting toward legitimate sales for its Billboard 200 chart.
“Nothing was actually for sale … the passionate and articulate argument by Jay’s team that something was for sale and Samsung bought it also doesn’t mesh with precedent,” Billboard editorial director Bill Werde wrote last month on the magazine’s website.