Phone Manufacturers Settle Privacy Battle Over Carrier IQ

Six mobile phone manufacturers have agreed to resolve a privacy class-action alleging that they installed controversial key-logging software developed Carrier IQ, according to court papers filed on Wednesday. 

Details of the settlement haven't yet been made public. Last year, Carrier IQ agreed in principle to resolve the allegations, but those terms also haven't yet been publicized. U.S. District Court Judge Edward Chen San Francisco gave all of the parties until mid-January to file additional papers, which presumably will outline the settlement terms.

If accepted by Chen, the deal will resolve one of the highest-profile privacy controversies of the decade. Allegations that Carrier IQ's software violated users' privacy surfaced in November of 2011, when a researcher posted a video that appeared to show the company logging keystrokes.

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That report prompted a slew of class-action lawsuits against Carrier IQ as well as Motorola, Pantech, Samsung, LG Electronics, HTC, and Huawai.

After reports about Carrier IQ's software were published, the company acknowledged that its software sometimes logs the contents of messages, but said the data isn't readable. The company also said its software was intended to help mobile carriers to discover the source of network problems, like dropped calls.

News about the software spurred the Federal Trade Commission to bring an enforcement action against HTC. The FTC accused the manufacturer of failing to disable a code that was used in testing. HTC also allegedly installed Carrier IQ in such a way that many third-party apps could access users' keystrokes and gain access to the phone numbers users' called, browsing histories and other data.

The manufacturer settled those charges by agreeing to issue software patches. The company also agreed to establish a security program and undergo security audits for 20 years.  

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