Verizon's planned $4.8 billion acquisition of Yahoo's key assets should spur the Federal Communications Commission to move forward with tough privacy rules, consumer advocates say.
“Verizon’s recent buying-spree -- first AOL and now Yahoo! -- illustrates that ISPs are rushing to supplement their already robust data collection capabilities to better target marketing to their customers with highly personal and comprehensive data," New America's Open Technology Institute said today in a statement. "ISPs continue to seek ways to vertically integrate, the FCC must pass broadband privacy rules to give consumers the ability to choose whether they consent to their ISP engaging in such privacy invasive practices.”
Jeff Chester, executive director of the privacy group Center for Digital Democracy, adds the "proposed takeover of Yahoo’s core digital data advertising business, when combined with the capability to gather information from its wireless devices, broadband networks, and set-top boxes," gives Verizon "control over the key screens that Americans use today."
The long-rumored deal, officially announced today, involves Verizon purchasing Yahoo's online services for consumers -- including email, Tumblr, search, finance and other properties. The takeover comes one year after Verizon announced it would purchase AOL for $4.4 billion -- an acquisition that consumer advocates said raised "substantial and urgent privacy concerns."
At the time, advocates pressed the FCC to move forward with broadband privacy rules. Since then, FCC Chairman Tom Wheeler proposed regulations that would prohibit Internet service providers from using information about consumers' Web activity for ad targeting without their explicit consent.
Verizon seems to particularly rile privacy advocates due to its history of inserting unique tracking headers -- 50-character alphanumeric strings -- into unencrypted traffic on the mobile network. Ad networks were able to use those headers to send targeted ads to mobile users, even when they tried to avoid tracking by deleting their cookies.
In March, the FCC fined Verizon $1.35 million for the headers. The agency said at the time that its investigation focused on whether Verizon violated the Communications Act's privacy provisions -- which require carriers to protect customers' "proprietary information" -- and whether the company violated a 2010 net neutrality rule requiring disclosure of broadband management practices.
Verizon also promised to obtain subscribers' opt-in consent before sharing tracking headers with a third party for targeted ad purposes. The company will allow consumers to opt out of having headers inserted into mobile traffic, and to opt out of having the headers used for ad purposes by companies affiliated with Verizon.
By the time the FCC moved against Verizon, the company had already changed its practice to allow customers to opt out of the headers; Verizon also had narrowed its targeting program by saying it will only send the header to Verizon companies.
Not everyone says Verizon's purchase of Yahoo shows the need for privacy rules. The libertarian group TechFreedom says the FCC's proposed regulations would hinder Verizon's efforts to garner more online ad dollars.
"The biggest challenge for the combined company is the FCC’s proposed privacy rules,” TechFreedom president Berin Szoka said today in a statement. “The FCC would require Verizon to obtain a separate opt-in from its broadband customers for any Yahoo! service, regardless of how sensitive that data at issue is. That blanket rule will make it a lot harder for Verizon to innovate -- not just in advertising, but in other apps and services that it could offer to its customers."