The FCC is taking a $1.35 million bite out of Verizon over its use of "supercookies."
The FCC said Monday that Verizon has agreed to pay $1.35 million and inform customers and require them to affirmatively opt in before Verizon inserts so-called super cookies into their mobile Internet service.
That is according to a settlement between the FCC and Verizon over the former's investigation into the practice. It is the second such enforcement action under the FCC's Open Internet rules, which for the first time apply to wireless broadband and include enhanced transparency requirements about network practices.
The "supercookies," or UIDH (unique, undeletable identifiers), allow for delivering targeted ads from Verizon and third parties.
"As a result of the investigation and settlement, Verizon Wireless is notifying consumers about its targeted advertising programs, will obtain customers’ opt-in consent before sharing UIDH with third parties, and will obtain customers’ opt-in or opt-out consent before sharing UIDH internally within the Verizon corporate family," the FCC's Enforcement Bureau said in announcing the settlement.
Enforcement Bureau chief Travis LeBlanc gave Verizon credit for cooperating with the investigation and being willing to change the practice.
Verizon has agreed to a three-year compliance plan.
The first Open Internet order wireless broadband related enforcement action was in June 2015, when the FCC proposed a $100 million fine against AT&T for "misleading its customers" about the data speed limits on its so-called “unlimited” mobile data plans, which AT&T is fighting.
The FCC has yet to come up with a framework for exercising the new broadband privacy authority it is asserting over both wired and wireless broadband, but that framework could be revealed as early as this month.
“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," said Verizon spokesman Richard Young. "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.”
"This is a win for consumers that will hopefully make companies think twice before engaging in practices that violate consumer privacy,” said Sen Bill Nelson (D-Fla.). Nelson, ranking member of the House Energy & Commerce Committee, which oversees the FCC, was among the legislators who were concerned about the supercookie issue. Nelson had joined a letter seeking more info from the company, and had urged the FCC to look into it as well.
“Today’s FCC action puts all broadband providers on notice that they can no longer hide behind vague disclosures about ‘information collection,’ or refuse to give their subscribers real choices when it comes to sharing customer information," said Harold Feld, SVP of Public Knowledge."
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.