Microsoft claims that any location-aware applications - applications that use the location services on a Windows Phone - offer a number of benefits. For example, you can find local movie times, weather, or directions to the nearest coffee shop.
Microsoft says that when you allow an application or game to access your device's location, the application or game will connect to Microsoft's location services and request the approximate location of the device. The location service will respond by providing the application or game with the location coordinates of the user's device (when available), which the application or game can then use to enrich the user experience.
To provide location services, Microsoft assembles and maintains a database that records the location of certain mobile cell towers and Wi-Fi access points. These data points are used to calculate and provide an approximate location of the user's device by comparing the Wi-Fi access points and cell towers that a user's device can detect to the location database, which contains correlations of known Wi-Fi access points and cell towers to observed latitudes and longitudes.
Microsoft uses two methods to assemble and maintain its location database: collection from managed driving and collection from mobile devices using location services.
The company uses mobile teams who drive vehicles equipped with mobile phones that contain software which collects Wi-Fi information broadcast by Wi-Fi access points and then transmits this information directly to Microsoft's location database. The process is similar to when a user searches for Wi-Fi "hot spots" on a mobile device or laptop, and the information collected is the same information that any user can view when trying to connect to available networks from a personal computer or other mobile device.
By using the GPS available on the mobile phone that is used to collect Wi-Fi access point information, Microsoft also observes the actual latitude and longitude when the vehicle observes the Wi-Fi access point information. This allows the location database to associate particular Wi-Fi access points with a particular location.
When Microsoft conducts managed driving, the phones in the vehicles observe the following Wi-Fi access point information: BSSID (that is, the Media Access Control [MAC] address); Signal strength; and Radio type (for example, 802.11n.)
By using the GPS available on the mobile phone used to collect Wi-Fi access point information, these phones will also observe the actual latitude/longitude and direction and speed when the vehicle observes the Wi-Fi access point information.
In addition to managed driving, in order to assemble and maintain its location database, Microsoft surveys available Wi-Fi access points when users are using location-aware features or applications on their mobile device. These Wi-Fi access points are only surveyed if the user has given permission to turn on location services on the device and Wi-Fi is turned on on the device. he Wi-Fi access point elements observed and information collected from mobile devices includes BSSID (the MAC address of the Wi-Fi access point); signal strength and a randomly generated unique device ID. If GPS is available on the mobile device, Microsoft will also collect the observed latitude and longitude, the direction and speed.
Microsoft added that applications that use a location are required to provide the ability to turn off that application's access to a user's location. Users can always turn off access for all applications by turning off location services.
Microsoft decicion to detail its data collection policies follow a recent report, which showed that the iPhone and iPad store location data about users on the devices. Additional research found that both Apple and Google collect location information about users even when applications that require location information aren't running.
Google has defended itself by saying that location sharing by users of Android-based mobile phones is opt-in and that all location data the company stores is anonymized. Apple has not commented on the situation.
Last week, the Illinois attorney general, Minnesota Senator Al Franken and Congressman Edward Markey have all asked Apple and Google to respond to questions about their location collection activities. Two consumers have also filed a lawsuit in Florida charging both companies with fraud. In addition, governments in Korea and Europe are reportedly investigating the matter.