Selling information on customers' geographic locations and app usage has put Verizon Wireless in the middle of a controversy on privacy and wiretapping regulations.
Verizon's new initiative, known as Precision Market Insights, involves giving marketers reports on when and where customers use their mobile apps, according to an article by CNET News. The wireless carrier can also link this data to databases with information on the user's gender, age and even hobbies or interests.
"We're able to view just everything that they do," Bill Diggins, U.S. chief for the Verizon Wireless marketing initiative, said during a conference this year. "And that's really where data is going today. Data is the new oil."
According to Verizon, its program is legal because it does not reveal any identities. Also, customers can opt out at anytime.
Hanni Fakhoury, a staff attorney at the Electronic Frontier Foundation, said in the article that any wireless carrier releasing information on which websites its customers visit could "run afoul of the Wiretap Act."
"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," Fakhoury said. "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."
On the other hand, because Verizon Wireless allows its customers to opt out of the program, the company technically is not accessing information without consent. Ryan Radia, associate director of technology studies at the Competitive Enterprise Institute, said in the article that actions taken by Verizon are "sufficient to satisfy the Wiretap Act" because it puts the customers on notice.
" ... There’s a gold-mine in those network logs and subscriber database — if that data is used both aggressively, and within reason and legal limits," noted Rich Karpinski, senior analyst with Yankee Group. "It’s unlikely – and indeed appears not to be the case – that Verizon would jump into this important but controversial new market without getting its legal house in order. That said, operators pursuing big data strategies must be vigilant about how they use that data, how partners use that data, and above all how comfortable their customers feel about how that data is being used."