The federal government should play a larger role in protecting consumer privacy, according to a recentreportissued by the Government Accountability Office (GAO). The report deals specifically with location data, which is collected from smartphone users by companies offering location-based services.

This location data collection can pose privacy concerns for consumers. For example, companies often sell this type of information to advertisers but consumers are often unaware of this fact. Location data can also lead to identity theft if companies retain the information for long periods or sell the information to third-parties with poor data security.

While industry associations have developed voluntary guidelines, companies have not consistently implemented them. According to the report, some companies disclose that they are collecting the data but do not explain how it will be used or whether it will be sold to third-parties. Many companies that did state the data was sold did not say how third-parties would use the information.

The report noted: “Lacking clear information, consumers faced with making a decision about whether to allow companies to collect, use, and share data on their location would be unable to effectively judge whether the uses of their location data might violate their privacy.”

To protect consumer privacy, the report suggested that the Federal Trade Commission (FTC) make compliance with industry guidance mandatory. Barring that, the report urged the FTC to issue its own guidance because “it has not issued comprehensive guidance that could inform companies of the Commission’s views on the appropriate actions companies should take to protect consumers’ mobile location data privacy.”