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FCC fines Verizon $1.35 million over 'supercookie' tracking

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Verizon must now receive consent to share tracking information

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Verizon is settling with the FCC over its use of an ad targeting technology known as a "supercookie," which tracks the websites visited by phones on its network. Supercookies allow websites to better target ads to visitors with Verizon cellphone service; but those visitors — for a period of time — weren't informed of the tracking or given the option to opt out. Because of that, Verizon will pay a fine of $1.35 million and will now have to receive customer permission before sharing tracking data with other companies or even within its organization, including with sites owned by AOL.

"[Consumers] should have a say in how their personal information is used."

After an initial backlash, Verizon allowed customers to opt out of its supercookie tracking program about a year ago. Today's settlement pushes the options Verizon offers customers even further, allowing those who don't opt out of the program to limit who gets to see their information. That's an important change, as a major concern with supercookies from the start was that websites might be able to permanently track someone, since it was impossible for a person on Verizon's network to disassociate themself from the supercookie. As the EFF put it, "It allows third-party advertisers and websites to assemble a deep, permanent profile of visitors' web browsing habits without their consent."

In addition to requiring that consumers opt in to having their data shared, Verizon will also have to inform customers about its ad-targeting practices in the first place. Verizon says that it's already been working on this. "Verizon gives customers choices about how we use their data, and we work hard to provide customers with clear, complete information to help them make decisions about our services," Rich Young, Verizon's regulatory spokesperson, says in a statement. "Over the past year, we have made several changes to our advertising programs that have provided consumers with even more options. Today’s settlement with the FCC recognizes that. We will continue to give customers the information they need to decide what programs and services are right for them."

The FCC says that this settlement represents a defense of its Open Internet Transparency Rule; its second enforcement action to date following a fine against AT&T over unlimited data plans. The Transparency Rule is an extension of its net neutrality rules meant to require clear and accurate communication to consumers. It's possible that we'll see stricter rules around ad tracking developed as the commission begins determining how Title II applies to carriers. For now, the FCC seems to suggest that there's some degree of tracking — albeit with clarity and the option to opt out — that's acceptable. "Consumers care about privacy and should have a say in how their personal information is used, especially when it comes to who knows what they’re doing online," Travis LeBlanc, chief of the FCC's Enforcement Bureau, says in a statement. He continues, "Privacy and innovation are not incompatible. This agreement shows that companies can offer meaningful transparency and consumer choice while at the same time continuing to innovate."