AOL CEO Promises 'The Market' Will Keep Verizon, AOL Honest About Sleazy New Stealth Cookies

from the trust-us,-we're-the-phone-company dept

"He said the market would prevent companies from abusing the swaths of data they collected. "If consumers don’t trust you it’s not worth whatever you’re going to do with the data,” Armstrong said. “Verizon is probably more sensitive to data than most Internet companies.” Armstrong said he would not want to be at a company in the future that had the opportunity to gather and optimize data and didn’t use it. “Data is oil for this economy,” Armstrong said. “Oil can be used really well, and oil can be used really poorly."

"A couple of years back during the debate on net neutrality, I made the argument that industry leadership through some form of oversight/self-regulatory model, coupled with competition and the extensive oversight provided by literally hundreds of thousands of sophisticated online users would help ensure effective enforcement of good practices and protect consumers."

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If you recall, Verizon has been under fire for much of the last year for the company's new stealth "cookies," which involve modifying user traffic to inject a unique identifier traffic header (UIDH) into each packet. This header allows Verizon and other companies to track a user's online behavior and build complete online user profiles, and can't be disabled via the traditional browser settings. Verizon initially tried to claim this unencrypted data attached to packets couldn't be used to build profiles by third parties, right before a third party showed just how easy it was to apparently do so.As we recently noted , Verizon's new UIDH system has now made its way to the AOL empire after Verizon acquired the company for $4.4 billion earlier this year. The fracas was "covered" by Verizon-owned TechCrunch (bonus points: try to findsentence in this article that describes the potential downside of what Verizon/AOL are doing), which quoted AOL CEO Tim Armstrong as declaring that "the market" will somehow protect you, the consumer:Yeah, here's the thing, Tim. Nobody trusts Verizon. Whether it's the company's relentless attacks on net neutrality, its ripping off of countless towns, states and cities , or Verizon's ham-fisted belief in closed networks and locked-down devices, "trust" isn't a word anybody really associates with Verizon. And no, Verizon isn't "probably more sensitive to data" than other companies, as the millions of users who've had their data shoveled over to the NSA can attest. If there's a company in the United States that's likely to use data irresponsibly and "really poorly," there's a pretty damn good chance it's going to be Verizon.Remember, it took security researchersto even discover what Verizon was doing to user traffic. It took another six months of relentless media criticism for Verizon to even let users opt out of the practice. Does that sound like a company that's using user data responsibly? Does it sound like a company that's "more sensitive to data" than most Internet companies?Meanwhile, this idea that magic market forces will somehow keep data-collection parasites honest is something Verizon's been arguing for years. Back in 2008, while trying to shoot down improved user privacy protections, Verizon insisted that public shame would keep the company honest:And yet "hundreds of thousands of sophisticated users" had no idea Verizon was secretly modifying their user traffic for two full years, so how exactly did that work out for end users? Yes, there are times you should trust in the ability of "the market" to sort itself out, especially if dealing with fragile emerging ecosystems. But in this case it seems abundantly clear that what "the market" wants is for consumers to be docile cash cows who nod dumbly as every shred of data is collected and monetized, and their personal privacy preferences are utterly ignored.

Filed Under: advertising, stealth cookies, tim armstrong, tracking

Companies: aol, techcrunch, verizon