As detailed in an order issued Monday by the FCC’s Enforcement Bureau, Verizon Wireless has agreed to pay the FCC a fine of $1.35 million and adopt a three-year compliance plan to settle an agency probe into the company’s use of “supercookies” to track subscriber online activity and deliver targeted advertising to subscribers. 

Unlike the cookies that users delete from their web browsers to protect the privacy of online searches, supercookies create unique identifiers that remain hidden and cannot be erased.  An FCC investigation into Verizon’s use of supercookies revealed that the carrier began using the tracking technology in 2012 without disclosing its use to subscribers.  Observers say that the settlement between the FCC and Verizon represents the agency’s second major enforcement action under Open Internet rules that relate to transparency.  (In the first action of its kind, the FCC proposed last year to subject AT&T to a fine of $100 million for “misleading its customers about the data speed limits on its so-called ‘unlimited’ mobile data plans.”)  The FCC commenced the probe in December 2014 as news reports surfaced that online advertising firm Turn was using Verizon supercookies to “covertly track smartphone users.”  In a press release accompanying Monday’s order, the FCC noted that Verizon waited until March 2015 “to disclose its use of [supercookies] and . . . offer customers the opportunity to opt-out of the insertion of unique identifiers into their Internet traffic.” 

Under the terms of Monday’s consent decree, Verizon will adhere to various commitments that include (1) full disclosure of its supercookie practices and policies to its customers, (2) obtaining opt-in consent from subscribers before sharing supercookies with advertisers and other third-parties, and (3) allowing any customer who consents to supercookie use to opt-out at any time.  Verizon must also appoint a compliance officer and file periodic compliance reports with the FCC over the next three years.  Declaring that consumers “should have a say in how their personal information used,” FCC Enforcement Bureau Chief Travis LeBlanc hailed the agreement as one that demonstrates how “companies can offer meaningful transparency and consumer choice while at the same time continuing to innovate.”