Verizon to pay fine over use of 'supercookies'

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Verizon Wireless will pay a fine and make changes to its internal practices as part of a settlement with the Federal Communications Commission (FCC) over the use of so-called supercookies to track its customer’s Web browsing habits.

Under the agreement, customers will have to consent to have trackers shared with services not controlled by Verizon and will either have to opt-in or opt-out for the supercookies to be shared within the Verizon universe of services. The firm must disclose that it is using the code to track users.

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They will also pay a roughly $1.3 million fine.

“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, the chief of the FCC’s Enforcement Bureau, said in a statement. “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."

The settlement addresses Verizon’s use of the tracking code, starting in 2012, to attach unique identifiers to its users Web traffic. This helped the company target ads based on what its customers were doing on the Internet.

But privacy advocates said it was very difficult for customers to block or remove the code, and in 2014 the FCC launched its probe. The settlement pertains not only to allegations that the company improperly handled consumer information but also that it failed to appropriately disclose its use of the trackers.

A Verizon spokesperson did not immediately return a request for comment on the settlement.

The timing of the settlement is significant because it comes as the agency is preparing new privacy rules for broadband providers spurred by its landmark net neutrality rules from last year. Industry groups have said they hope the rules will replicate the standards used by the Federal Trade Commission, but privacy advocates say those standards are weak and hope the FCC will stake out a stronger position from which to fight against privacy violations.

An item related to the rules could come as early as this week, when the commission announces the tentative agenda for its March open meeting.