Phone Companies Reportedly Selling Customers' Personal Data for Profit

Phone companies have begun selling personal data, such as addresses, Web browsing history, apps downloaded, and videos watched, to the highest bidder, CNNMoney reports.

In mid-October, Verizon Wireless changed its privacy policy to allow the company to record customers' location data and Web browsing history, combine it with other personal information like age and gender, aggregate it with millions of other customers' data, and sell it on an anonymous basis.

Personal data such as that could be very useful — and lucrative — to third-party companies who wanted to figure out, for example, the best place to open a new pet store. The owner could buy a marketing report from Verizon about a designated area. The report might reveal which city blocks get the most foot or car traffic from people whose Web browsing history reveals that they own pets.

According to CNNMoney, Verizon is the first mobile provider to publicly admit that it is actually selling customer information directly to businesses — all for financial gain. All four national carriers use aggregated customer information to help outside parties target ads to their subscribers. AT&T, Sprint and T-Mobile insist that subscriber data is never actually handed over to third-party vendors.

AT&T's AdWorks program promotes AT&T's customer base to advertisers. On its AdWorks website, AT&T touts its ability to "reach customized audience segments based on anonymous and aggregate demographics." It then shows customers carefully tailored coupons, in-app ads and Web ads. Sprint, like Verizon, tracks customers’ Web browsing history on their mobile devices as well as what applications they use, spokesman Jason Gertzen said, according to CNNMoney. Sprint uses that data to help third parties target ads to customers. And while Verizon does lets advertisers target customized messages to its subscribers' mobile phones, it does not incorporate its customers' Web surfing or location data, a company spokesman said, according to CNNMoney. Instead, Verizon relies on other personal information, including customers' demographic details and home address. T-Mobile declined to answer specific questions about what kind of information it shares or sells, instead pointing CNNMoney to T-Mobile's privacy policy, which suggests that the company does not divulge customer information. But according to CNNMoney, a T-Mobile spokeswoman acknowledged that the company "collects information about the websites that customers visit and their location" and that it "may use that information in an anonymous, aggregate form to improve our services."
Brian Kennish, a former DoubleClick engineer who developed the advertising network's mobile ad server, told CNNMoney that wireless companies have been sharing users'  location data with third parties for more than a decade. "At the end of the day, we're getting to a situation where customers are the products that these wireless companies are selling," Nasir Memon, a professor of computer science at New York University's Polytechnic Institute, told CNNMoney. "They're creating a playground to attract people and sell them to advertisers. People are their new business."
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