Apple has notified App Store developers that they will be prohibited from using location-based information for mobile advertising,” MacNN reports. “The company claims the GPS data can only be used to provide ‘beneficial information.’”

MacNN reports, ‘If your app uses location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user’s location, your app will be returned to you by the App Store Review Team for modification before it can be posted to the App Store,’ Apple said.

“Many analysts believe Apple is preparing to launch a mobile advertising network that will serve ads through free apps on the iPhone, iPod touch and iPad,” MacNN reports. “The company recently acquired Quattro Wireless, a mobile advertising specialist, after reportedly failing to sign a deal to purchase AdMob. The latter company was later picked up by Google.”

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