The bill was introduced by Rep. Edward Markey (D-Mass.), who is co-chair of the Bi-Partisan Congressional Privacy Caucus. The legislation is a result of concern over last year’s Carrier IQ controversy, which centered on a piece of software that wireless operators installed on smartphones in order to help track network congestion and end-user quality problems, with an eye to improving service. The software, which Sprint and others quickly disabled after the flak started, was meant to be a diagnostic tool but has the capability to be used for ill: Android developer Trevor Eckhart posted a video showing how the software logs text messages, web searches and other activities without the mobile user’s knowledge or permission – promptly setting off big privacy alarm bells.

“Consumers should know and have the choice to say no to software on their mobile devices that is transmitting their personal and sensitive information,” Markey said. “This legislation will provide greater transparency into the transmission of consumers’ personal information and empower consumers to say no to such transmission.”

The law imposes a regulatory aspect to privacy, which may not be popular with GOP lawmakers. It requires anyone performing data collection, even with consumers’ opt-in permission, to inform the US Federal Trade Commission and the FCC of their tracking activities. The agencies would be given enforcement power as well.

Also, the legislation would require that any tracking software contained on the device at purchase or included in software updates be disclosed upfront, giving consumers the right to refuse tracking. This disclosure must include what types of information is collected, who it is transmitted to and how it will be used.

Already, the backlash has started. “In the absence of government mandates, and industry codes of conduct, consumers are doing some sensible things to protect themselves,” Software & Information Industry Association public policy chief, Mark MacCarthy, says. ”But the lack of consumer trust is troubling and can only inhibit growth in the market. If consumers just say no, the whole industry suffers.”