Can a phone\´s GPS "Lie" intelligently?

Introducing finer-grained privacy controls would let users divulge only enough location information to achieve a desired service quality. Although mobile devices are making information access ubiquitous, many applications lack fine-grained controls, which puts user location privacy at risk. For some location-based applications, however, an intelligent GPS could “lie” about the phone´s precise location to protect user privacy without affecting search accuracy.