Naturally, this set off a wave of public backlash and alarm bells among consumer interest groups. But when we took a closer look at what other carriers were doing, it turns out Verizon wasn't the only one making a little side revenue from selling customer data.
All the four major carriers collect, anonymize (strip off any personal identifiers), and sell information about how its customers use their technology, from browsing history to location information. No names or contact information are attached, so technically this isn't the same as selling "personal information" without your consent, which is illegal.
"We do not sell, rent, or otherwise provide personal information to unaffiliated third-parties (parties outside the T-Mobile corporate family) to market their services or products to customers," said T-Mobile spokesman Troy Edwards.
"Our customers' personal information is never disclosed to advertisers through AdWorks offerings without prior consent," said AT&T's Mark Siegel.
So where does the data go? Some is used in marketing reports and sold to third parties, while other times the data is sold raw. The only noticeable effect is that you may find more relevant ads popping up when you browse apps and Web sites on your phone.
But if you still find that creepy, you can always opt-out. Here's how:
Fill out this Web form to opt out of Verizon's data collection, or call Verizon at 1-866-211-0874.
You can call 1-(800)-865-7786 to opt out or fill out this snail-mail form.
Click here to opt-out of ad matching by Yahoo. Click here to opt out of data collection by the Network Advertising Initiative, and here to remove yourself from YP.com's targeted advertizing program.
Click here to opt out of data collection by the Network Advertising Initiative, though T-Mobile notes that this is a cookie-based opt-out so you'll have to revisit the NAI's site every time you clear your cookies, or change browsers or computers.
The one law governing collection and sharing of customer information is Section 222 of the Communications Act, which prohibits the disclosure of calling records information without a customers' consent.
But John Simpson of Consumer Watchdog says that although the Communications Act stops companies from selling personally identifiable information, companies can easily argue that they are simply selling "access to various categories of people."
"Our privacy's increasingly being compromised so companies can fatten their bottom lines. People need the right to not have their activities tracked when their go on the Internet whether through a mobile device or a desktop computer. Passing Do Not Track legislation is the way to accomplish this," he said.
Furthermore, the laws preventing carriers from overstepping their boundaries are weak. A lawyer at the American Civil Liberties Union (ACLU) said U.S. privacy rights at the federal level are up to the Supreme Court's interpretation of the Fourth Amendment. But the Fourth hasn't protected consumers in cases like U.S. v. Miller 425 U.S. 435 (bank records are not protected by Fourth) and Smith v. Maryland 442 U.S. 735 (1979) (holding records of dialed numbers are not protected).
Until then, buyer beware.