Top U.S. wireless providers say they plan to stop selling consumers’ location data to a group of data brokers, shedding light on how the information is collected and used for various sales and services.
Following an investigation into the relationships between telecoms and lesser-known data brokers, Verizon said it plans to suspend relationships with data aggregators LocationSmart and Zumigo. The announcement comes after U.S. Sen. Ron Wyden, D-Ore., asked the Federal Communications Commission to investigate how a corrections facility was able to track Americans through a third-party company called Securus Technologies, which gave corrections officers “unrestricted access” to the location of customers. (Ten days later, the FCC opened an investigation into the companies’ practices, according to CNBC.)
In a June 15 letter to Wyden, Verizon chief privacy officer Karen Zacharia detailed the company’s privacy policies for accessing a customer’s location data. For example, she said, the company usually only allows access after getting the permission of consumers, such as to verify their identity or provide customer service.
“When these issues were brought to our attention, we took immediate steps to stop it,” a Verizon spokesperson said in an email to Adweek. “Customer privacy and security remain a top priority for our customers and our company. We stand by that commitment to our customers.”
Others including AT&T, Sprint and T-Mobile have followed suit, sending Wyden their own letters explaining at length how location data is collected and how it’s used. Some of them say they will pause their own deals with third-party brokers, while others say they plan to review existing relationships.
A spokesperson for LocationSmart said the company only tracks consumers using an opt-in method, citing AT&T’s letter that said unauthorized access by Securus only affected “two-tenths of 1 percent” of overall tracking. LocationSmart will continue working with wireless carriers to come up with a “new method” for providing location tracking for services such as finding cars requesting roadside assistance. The spokesperson said only about 5 percent of LocationSmart’s business is location-based marketing.
Zumigo could not be immediately reached for comment.
“Our top priority is to protect our customers’ information,” an AT&T spokesperson said via email. “And, to that end, we will be ending our work with aggregators for these services as soon as practical in a way that preserves important, potential lifesaving services like emergency roadside assistance.”
In a tweet on Tuesday, T-Mobile CEO John Legere said the company would not sell customer location data to “shady middlemen.” However, in its letter to Wyden, the company said it already has “appropriate controls in place” but has ended its relationship with Securus while still reviewing other data programs more broadly.
The changes come at a time when companies and consumers are evaluating how data could and should be collected for everything from advertising to customer services. Meanwhile, data is also a potentially lucrative source of revenue for companies because it helps attract relevant advertisers. Data has been a key piece of Verizon’s annual pitch for several years in a row, especially since creating Oath, the umbrella company for its combined Yahoo, AOL and technology properties.
Even while they seek to assure Washington that they have their data policies under control, telecoms have spent money on the West Coast to oppose a potential November ballot initiative in California that would force large internet companies to require consent from consumers before their data can be tracked or used.
According to the California secretary of state’s website, Verizon and AT&T have each donated $200,000 to oppose the initiative, along with Google and Facebook, although Verizon and Facebook have since pulled their formal opposition to the proposal known as the California Consumer Privacy Act of 2018.
“Our company is now focusing on creating or backing potential Federal legislation that would bring a strong, national set of privacy principals, goals and reforms—an effort that would ideally cover and include the entire eco-system,” a Verizon spokesperson told Adweek via email earlier this month. “Rather than engaging in a state-by-state regime, we believe a national set of rules is the best course, and that’s where we’re concentrating our efforts.”