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Groupon Pressed by U.S. Lawmakers to Explain Privacy Policy

July 21 (Bloomberg) -- Two U.S. lawmakers pressed Groupon Inc., the top online-coupon provider, for more information on how the company will protect consumer privacy as it collects and shares more personal information from customers.

Groupon, which is preparing for an initial public offering, announced changes to its privacy policy this month that would expand the sharing of information with third parties, Representatives Joe Barton and Edward Markey, who head the Bi-Partisan House Privacy Caucus, wrote in a letter today to the company.

“Groupon has made it clear that they are expanding their business model by collecting more personal information and even tracking your location,” Barton, a Texas Republican, said in a statement today. “Avoiding full price shouldn’t put your privacy at risk.”

The lawmakers asked Groupon to clarify its willingness “to allow customers to ‘opt-in’” to having their location tracked and whether the company has experienced any data breaches, according to the three-page letter addressed to Groupon chief executive officer Andrew Mason.

“We have received the written inquiry from Representatives Barton and Markey and we look forward to explaining our business model and privacy policies to them as soon as possible,” said Julie Mossler, spokeswoman for Groupon.

Business Partners

Barton and Markey, a Massachusetts Democrat, asked whether Groupon’s business partners are required to adhere to Groupon’s privacy policies. The lawmakers requested a response from Groupon by Aug. 10 and said their inquiry was prompted by a Washington Post report on the company’s policy change.

“Groupon may be collecting personal information such as phone numbers, emails and location data from mobile devices,” Markey said in a statement. “It’s critical Groupon gets this right.”

Groupon, based in Chicago, pioneered a business model now used by 345 sites and accounting for about $133 million in revenue in top North American markets, according to Yipit Inc., which studied online daily deals in 30 major North American cities.

Groupon registered in June to raise $750 million in an IPO and named Morgan Stanley, Goldman Sachs Group Inc. and Credit Suisse Group AG as the lead managers for the sale.

To contact the reporter on this story: Juliann Neher in Washington at jfrancis31@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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