Verizon Settles With F.C.C. Over Hidden Tracking via ‘Supercookies’

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WASHINGTON — The Federal Communications Commission said Monday that it had reached a settlement with Verizon Wireless for its use of hidden tracking technology known as “supercookies,” which were used for targeted advertising without customers’ permission.

As part of the settlement, Verizon Wireless was fined $1.35 million and is required to notify consumers of its data collection program, as well as get permission from users before sharing consumer data with third-party partners.

The penalty was small, but the enforcement action drew wide attention from the telecom industry as a glimpse of the F.C.C.’s expanding ambitions into privacy regulation. The agency is expected to soon consider first-time privacy rules for Internet service providers that could include mandates that wireless and fixed broadband providers get permission from users before tracking their behavior online.

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“The Verizon supercookies issue has been one of the big poster children for why you need to worry about ISPs tracking their customers and why you need rules for ISPs,” said Harold Feld, a legal analyst at the nonprofit media advocacy group Public Knowledge, referring to Internet service providers.

In its 15-month investigation of Verizon Wireless, the F.C.C. said it found that even among customers who had tried to delete regular cookies from their mobile browsers, the supercookies, or hidden code unique to each customer, were undeletable and used as a workaround to continue data collection. From 2012 to late 2014, Verizon Wireless used supercookies that could follow a mobile subscriber’s browsing history, the F.C.C. said, and Verizon Wireless and third-party companies used that data to target ads to users.

“Consumers care about privacy and should have a say in how their personal information is used, especially when it comes to who knows what they’re doing online,” Travis LeBlanc, F.C.C. enforcement bureau chief, said.

After the F.C.C. began its investigation, Verizon Wireless said, it began to disclose to customers its use of supercookies and provided the ability to opt out of data collection.

“Over the past year, we have made several changes to our advertising programs that have provided consumers with even more options,” Richard Young, a Verizon spokesman, said. “Today’s settlement with the F.C.C. recognizes that.”

The requirement of opt-in consent for data sharing with third-party companies gives mobile users a little more control over the consumer tracking of online ad networks and data analytics firms.

It also shows a greater interest by the F.C.C. to oversee consumer privacy. Jonathan Mayer, a privacy scholar at Stanford Law School, revealed on his blog last year that Turn, an advertising software company, was using Verizon’s supercookies to regenerate its own tracking tags after consumers had chosen to delete cookies. In November, Mr. Mayer was hired by the F.C.C.