The attached link is to an article on privacy and spatial technology by Professor George Cho of the University of Canberra in Australia, one of the leading experts in legal issues associated with spatial technology. (He also has published an excellent book on spatial law issues entitled Geographic Information Science: Mastering the Legal Issues.)
I found two of his points particularly important for spatial companies to keep in mind in their business transactions. First, that the "privacy threat is from the new inferences that may be made by correlating geographic information with personal information". Typically, sensitive information is associated with data that identifies "race, religion, political affiliations or sexual habits" not location. However, as Professor Cho points out "when processing data on persons, especially when locations are involved, say in terms of visiting synagogues on a regular basis or particular areas of ethnic concentrations, it is arguable that sensitive data are being processed and unintended inferences may be made about a person's religion or ethnicity." As a result, if a company is concerned that its spatial data will be used in a way that violates an individual's privacy, it should inquire as to whether its spatial data will be integrated with sensitive personal data and what privacy protections are being taken. It may even be prudent to include language on this issue in any contract or license agreement -- through representations and warranties or affirmative covenants.
Second, Dr Cho notes that "geospatial technology is inherently visual but this strength also exposes a major weakness in that it may produce map interences that may be both statistically and ecologically fallacious." The more spatial technology is pushed down to the consumer, the more likely that it will be used by those who do not understand its limitations. For example, that spatial data accuracy sufficient for one application may not be sufficient for another application. Therefore, it is important for a company to be aware of how its product could be be used for an unintended purpose, and if possible to take steps to warn against or even prevent such unintended use - through measures such as legal disclaimers.