The new Foursquare app automatically tracks users' locations unless they opt out of this feature.

Hiding in Foursquare's revamped mobile app is a feature some users might find creepy: It tracks your every movement, even when the app is closed.

Starting today, users who download or update the Foursquare app will automatically let the company track their GPS coordinates any time their phone is powered on. Foursquare previously required users to give the app permission to turn on location-tracking. Now users must change a setting within the app to opt out.

The update is an extreme shift for five-year-old Foursquare, whose eponymous app is known for a blue button that lets users "check in" to popular spots to earn graphical badges. That check-in feature is now gone, part of a new app Foursquare launched in May called Swarm in an effort to find a sustainable business model.

Instead of earning badges, Foursquare users are now encouraged to leave tips about the places they frequent. They will also get push notifications of recommendations of restaurants and bars based on places they've visited. A sushi lover exploring a new town might see suggestions on the best sushi spots automatically appear on her phone without having to open the app.

Tracking user whereabouts could arm Foursquare with more valuable data it can sell to partners and advertisers as it searches for new streams of revenue. The company hopes to analyze trends in where users go and what destinations are popular, and may sell that data to its partners, Chief Executive Dennis Crowley said in an interview.

But this type of persistent location tracking could scare off users who are growing increasingly wary of threats to their mobile privacy. A third of smartphone owners surveyed by the Pew Internet & American Life Project in 2012 said they have turned off the location-tracking capability on their devices, and most of those people were motivated by privacy concerns.

Foursquare's app goes beyond location-tracking features offered by competitors. Social apps like Twitter collect GPS coordinates to give users the option of sharing their location with friends, but don't collect this data when the app is off. When Facebook introduced a "nearby friends" tool on its mobile app earlier this year, it required uses to opt in to the feature.

Crowley says more users will be willing to share their location because they're getting a more valuable service in return.

"It's been our philosophy since we started that as long as we are recycling the data back to people, people will be interested in using the services," the CEO said. "You can't just collect a lot of information off people and not doing anything with it. It's not a fair trade."

That tradeoff wasn't provided by Goldenshores, the developer of a flashlight app for Android phones which collected users' location data and gave no clear explanation for why. The Federal Trade Commission settled with the company, mandating that it "clearly and prominently" explain to users why and how it collects such data.

Foursquare updated its privacy policy this week to warn users that with the new version of the app tracks and sometimes shares users' locations even when the app is closed.

Your real-time location is not shared on the Foursquare app. If you write a tip, like or otherwise interact with a place, users may infer that you have been to that location. Some content, like tips, are time stamped and other users could use that information to infer when you were at a place even though tips can be posted when you aren't at the place you are leaving a tip about.

Foursquare may need to take extra steps to educate users the privacy implications of its new app, said Justin Brookman, director of the Center for Democracy & Technology's Project on Consumer Privacy.

"Persistent location tracking is the sort of thing that you should have to affirmatively decide to turn on, and if it's not evident from the nature of the app, I think they have an obligation to clearly message to you that it will be constantly collecting location information in the background," Brookman said in an email.

In addition to the new privacy policy, Foursquare mentions the location-tracking in a screen that appears when users installs or updates the app. It reads:

Foursquare uses your phone's background location to help you find great places, and the best tips for when you're there. You can change this at any time in your settings.

Regarding the data Foursquare collects, Crowley said trend data provided to partners would never include users' real names.

"We might look at anonymized trends and say, there's a high density of people who like ribs and Arnold Palmers in the East Village," he said. Advertisers "might be really excited about getting their hands on that data," he said.

Related: Douglas Macmillan has details on digits.


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