All
iSpy conspiracy bullshit aside, you
are probably more interested in what your iPhone does with location data. Well, if you opt-in to the iPhone's location services, detailed—but anonymized—location data is transmitted back to Apple on a regular basis.
More » 
Source: http://feeds.gawker.com/~r/gizmodo/full/~3/ZBTjt-NdF_E/why-apple-collects-detailed-location-data-from-your-iphone
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