Yesterday, Verizon agreed to pay the FCC 7.4 million dollars as compensation for violating their customers’ privacy. Since 2006, the company did not explain to their new customers, that they can either approve or refuse to let Verizon share their personal data with marketing research. Verizon intended to use their customers’ information, such as location and technology habits, to advertise personalized new Verizon services to them. Unfortunately, Verizon was unaware that their customers were not asked until September 2012, but finally notified the FCC on January 2013. This action also violated another service policy, which requires companies to report to the FCC within five days, that its customers were not responding.
In defense, a spokesman for Verizon, on this page, claimed that a technological flaw prevented the customers from viewing the opt-out choice on their bill. Since this question for customers was supposed to automatically appear on statements, Verizon further demonstrates it is unprofessional to function as a business. If the company was professional, it would have questioned the reason why customers were not responding for a while. In addition, the company stated it did not submit its customers’ data to outside sources. Although there has been no official report if this statement is correct, it is extremely suspicious since the company did not receive any consents from customers for an extensive time period, it can easily spread their customer’s data without regarding how their customers feel. Without any consents, mass customization was not justified.
On the other hand, Travis LeBlanc, the Acting Chief of FCC’s Enforcement Bureau, pointed out that phone services must explain privacy options to its customers and acknowledge their choices. According to the Communications Act, phone companies are allowed to customize ads towards individual customers only if they gave the company permission. Besides sacrificing money to the FCC, Verizon promised it will ask its customers permission, by printing the request on their bills.