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Apple and Google had a smoother time on Capitol Hill than many people expected on Tuesday, as representatives of the companies appeared before Congress to defend their practices of using mobile devices to physically track consumers. Senator Al Franken, who chaired the privacy hearing, started the event off with praise for both companies.

“Don’t get me wrong. The existence of this business model is not a bad thing. I love using Google maps for free,” Franken (D-Minn.) said in a live webcast of the hearing. “What today is about is trying to find a balance between all those wonderful benefits and the public’s right to privacy.”

[Related article: Your Smarter Smartphone]

The hearing follows the discovery last month that some Apple and Google mobile devices track users everywhere they go, without consumers’ knowledge. Franken issued a strongly-worded press release, and sent a letter to Apple CEO Steve Jobs demanding to know how the data is collected and used.

Apple’s testimony at Tuesday’s hearing did little to explain the company’s use of tracking information or quell the controversy over Apple’s practices. Guy “Bud” Tribble, Apple’s president of software technology, said the company “does not track users’ locations. Apple has never done so and has no plans to ever do so,” Tribble testified.

But elsewhere in his testimony, Tribble quoted Apple’s privacy policy that the company “may collect, use and share precise location data.”

Tribble admitted that the location data collected by iPads and iPhones is not encrypted. The next major update of the devices’ software will encrypt that data, he said.

Alan Davidson, Google’s lead lobbyist, was a bit more direct about his company’s gathering of users’ location data, which is stored in each Android phone’s data payload. “As we’ve said it as a mistake and we never intended to collect this payload information,” Davidson said.

[Resource: Understand your exposure to Identity theft with the Identity Risk Score]

While Franken talked about the privacy implications of mobile device tracking in moderated tones, federal regulators were more direct in their criticism. The rapid growth of mobile devices, which can track their users at all times, “raises serious privacy concerns,” Jessica Rich, deputy director of Federal Trade Commission’s Bureau of Consumer Protection, said in her prepared testimony. “If it falls in the wrong hands it can be used for stalking.”

Frank relayed a similar concern. When he first learned that Apple’s iPhones and iPads track their users’ movements, Franken said, he reacted with his strongly-worded press release and calls for a hearing after having received a call from the Minnesota Coalition for Battered Women, which worried about cases in which “a stalker or an abusive spouse has used the technology on mobile phones to stalk or harass their victims.”

Image: Kyle Rush, via Flickr.com

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