• by Wendy Davis , Staff Writer @wendyndavis, April 2, 2013

Euclid Analytics, a company that tracks brick-and-mortar shoppers via their smartphones, has failed to convince Sen. Al Franken (D-Minn.) that its technology poses no privacy risk.

“Euclid's use of opt-out location tracking -- regardless of whether a consumer actually enters a store equipped with this technology -- simply doesn't meet the standard of privacy Americans should be able to count on,” Franken said in a statement this week. “Their continued use of opt-out technology underscores the need for Congressional action to protect consumer location privacy.”

Euclid, which recently raised $17.3 million in venture funding, uses MAC addresses in smartphones to track people's physical movements in retail stores. The 3-year-old company tracks consumers in Nordstrom and Home Depot, among other stores, according to The New York Times.

Last month, Franken bashed Euclid Analytics for tracking brick-and-mortar shoppers via their smartphones. Franken also asked CEO Will Smith to answer a number of questions, including how many smartphones it has tracked, where it operates and whether it tracks people who walk by stores without entering.

Euclid said in its response that it has tracked around 50 million WiFi-enabled devices -- primarily smartphones. The company says it takes steps to protect users' privacy by hashing their MAC addresses. Also, it doesn't send clients data about any particular devices.

“A retailer using Euclid receives only anonymous, aggregated information such as: “Today 300 potential customers walked by your storefront and 150 entered. Of the 150, 15 percent stayed for less than 5 minutes, 55 percent stayed for 5-15 minutes and 30 percent stayed for longer than 15 minutes,' ”  the company says in its answer to Franken.

While Euclid allows people to opt out of its tracking, it seems unlikely that very many consumers have done so -- or that they even realize when Euclid is tracking them.

The company told Franken that, in the future, contracts with retailers will require them to post signage that includes opt-out information. Euclid also says it intends to institute a “comprehensive education program” informing retailers about the opt-out process.

That might not be enough to dispel privacy concerns -- either of consumers or on Capitol Hill. Franken, for one, says this kind of tracking should require explicit consent. He has vowed to reintroduce legislation to that effect.