Bluetooth Low Energy, The Tech Behind Beacons, Closes a Privacy Loophole

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BluetoothA few months after Apple effectively closed the door on wi-fi tracking, the organization overseeing Bluetooth low energy, the technology behind beacons, has done the same. This morning, Bluetooth Special Interest Group ratified the newest iteration of the wireless communication standard that will, among other things, hide the media access control (MAC) address that can be used to identify and track user movements.

The tactic, originally used to track users through wi-fi routers, came under heavy fire from privacy advocates and government officials last year. The MAC address serves as the equivalent of an IP address for wireless connectivity, allowing wi-fi antennas and bluetooth-enabled devices (in part) to communicate with nearby routers or beacons equipped with compatible technology.

According to a report from GigaOm, the ability to hide the MAC address will remain optional in the newest versions of the standard, Bluetooth 4.2. A device that needs to broadcast its identity for technical purposes can still use the identifier, but experts say the industry has already moved to less-permanent, softer, identifiers that a provider can easily delete.

“It’s an important change for the industry because it will help get people a lot more comfortable with keeping bluetooth on,” said Maya Mikhailov, executive vice president at GPShopper, a retail-focused mobile development shop. “It was originally designed to be a broadcast technology, and it should be used like that — not as a read technology.”

The move comes two months after Buzzfeed published a scathing report detailing an initiative by outdoor advertising giant Titan to install bluetooth beacons in hundreds of phone booths across New York City. Mikhailov says the outcry project, which the city was forced to shut down, was misinformed and demonstrated the lack of understanding around the way in which beacons work.

“The big misconception in New York was that people thought a beacon would track their device as they walked past, and that’s completely not the case. “Beacons interact with apps, so a person would need to have an beacon-enabled app installed [to be counted.]”

The move away from “readable” beacons more or less solidifies the position of video as the de facto technology for in-store analytics. Last month, New York-based Nomi, one of the early store analytics firms built around beacons and wi-fi tracking, was acquired by video analytics firm Brickstream after the iOS changes reportedly forced widespread layoffs.

Faster, not just safer.
The other major change in the new bluetooth protocol is speed. The group that controls the standard said that the newest iteration will allow devices to transmit data up to 2.5 times faster than the previous version. That’s a critically important upgrade for marketers, says Mikhailov.

“Even the massive change in speed from Bluetooth 1.0 to Bluetooth 4.0 made it commercially usable, and useful for marketing purposes. … If there’s fast speed and faster interaction with the devices that’s just going to benefit marketers with all sorts of programming they can do.”

Steven Jacobs is Street Fight’s deputy editor.