Verizon Says Selling Customer Info is Legal
Even though Verizon offers its customers a choice to opt out, the Big Red is still under fire for selling user data.
CNET reports that Verizon Wireless has begun selling information about its subscribers including geographical location, app usage, and web browsing activities. Platforms include Apple's iOS and Google's Android, and the information, which is reportedly being sold to marketers, may eventually link to third-party databases that contain information like the user's gender, age, and even deeper details like their favorite sports or pet.
At an industry conference which took place earlier this year, Bill Diggins, U.S. chief for the Verizon Wireless marketing initiative, boasted that the Big Red can see just about everything subscribers do on their devices. This is where data is going, he said. This is the new oil.
"We're able to analyze what people are viewing on their handsets," he said. "If you're at an MLB game, we can tell if you're viewing ESPN, we can tell if you're viewing MLB, we can tell what social networking sites you're activating, if you're sending out mobile usage content that's user-generated on video."
It gets even worse. This information gathering initiative, called Precision Market Insights, is perfectly legal according to the wireless carrier because all that data is aggregated and doesn't reveal the customers' actual identity. Even more, customers can supposedly opt out of the data scooping. However the Wiretap Act states that carriers may not "divulge the contents of any communication."
"I don't see any substantive difference between collecting content from one person and turning it over to someone, and collecting it from multiple people, aggregating that information and then turning the aggregated data over to someone else," said Hanni Fakhoury, a staff attorney at the Electronic Frontier Foundation in San Francisco. "In the end, there is still a capturing of content from the user at some point -- and that's what the potential (Wiretap Act) problem is."
CNET points out that Verizon's own documents acknowledge that it sells "mobile-usage data that offers insights on the mobile-device habits of an audience, including URL visits, app downloads and usage." That means Verizon is engaging in deep packet inspection, and the wireless carrier is taking a big legal risk by disclosing URLs visited by its customers.
"If Verizon Wireless discloses the URLs you've accessed without your consent, it has violated (the Wiretap Act) -- even if Verizon Wireless doesn't disclose any other identifying information," said Ryan Radia, associate director of technology studies at the Competitive Enterprise Institute think tank. Yet he argues that by providing customers the option to opt out, Verizon is satisfying the Wiretap Act and can essentially do what it wants with user data.
Still, the thought of Verizon snooping on its users on a day-by-day level – and then selling that information to third-parties – is a little scary. "We're able to identify what that customer likes not by filling out a form, but by analyzing what they do on a day-to-day basis," Diggins said. "We're able to serve them products that we know they like because we've seen that they've gone through and downloaded products like it."
Have you opted out?