JEREMY HOBSON: The Internet radio company Pandora has been subpoenad as part of a broad federal investigation into smartphone applications. At issue is whether those apps are telling advertisers too much about smartphone users.
Marketplace's Gregory Warner reports.
GREGORY WARNER: If you put an app like Pandora on your smartphone, you're making a deal. You give them information about you -- age, gender, and preferences -- they sell that to advertisers.
ROB FRIEDEN: You don't get the free music for free you get the free music in exchange for the ability of Pandora to collect valuable information about consumer behavior.
Rob Frieden is professor of telecommunications and law at Penn State University. He says this deal only becomes criminal behavior when the company doesn't properly disclose how much information they're collecting. The government is using a law used to prosecute computer hackers to probing Pandora and other e-commerce companies. It could force the industry to look not just at what information they take but what they leave available for others to see.
FRIEDEN: The technology used by companies like Pandora and Facebook may be accessible by other unscrupulous data miners who could then link in to the data and do even more.
That's a deal that music-lovers didn't count on.
Gregory Warner for Marketplace.