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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

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 find one sentence 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:
"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."
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 researchers two years to 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:
"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."
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.

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  • icon
    Violynne (profile), 14 Oct 2015 @ 9:09am

    I went to AOL and added "verizon" as a keyword.

    The results aren't suitable for sensitive eyes. "Trust" wasn't a word returned unless "not" was included.

    At the bottom of the results, a disclaimer:
    "By using our product or services, you agree to have AOL restart its daily campaign of flooding your mailbox with CDs.

    Yes, we still have them, and yes, we need to get rid of them.

    Welcome back to AOL. We knew you couldn't stay away... by choice."

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Oct 2015 @ 10:47am

    Meanwhile, this idea that magic market forces will somehow keep data-collection parasites honest is something Verizon's been arguing for years.

    It will keep them honest, about what they tell the advertisers, but not in what they tell the users.

    reply to this | link to this | view in chronology ]

  • identicon
    David, 14 Oct 2015 @ 10:50am

    This is the U.S.A.

    If public shame were a force to be reckoned with, this country would be so different nobody would recognize it.

    Nixon would have loved this U.S.A., and this U.S.A. would have loved him back. Threaten a president with impeachment because he tried an end run around due process? What was America thinking? Bush and Obama have ordered thousands of extrajudicial murders and everybody loves them for it.

    Well, outside of the countries where America is raining death and destruction on civilians, that is.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Oct 2015 @ 10:51am

    The Oligopoly Market?

    Verizon would never be able to get away with this if we actually had a free market. Instead Verizon is leveraging their spectrum ownership to force their customers to give them more than just the content of their bill.

    We the people ought to be putting more strings on spectrum licenses besides just the leasing fees.

    reply to this | link to this | view in chronology ]

    • identicon
      Wendy Cockcroft, 16 Oct 2015 @ 7:32am

      Re: The Oligopoly Market?

      It's always fun watching the fur fly when someone actually tries to free up the market. Words like "socialist" and "government" get bandied about with gleeful abandon by people who have no clue at all about what either of those words mean.

      If we want a more free, more fair market we're not going to get there by voting with our wallets, people.

      reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    PaulT, 14 Oct 2015 @ 10:53am

    If you were consistent would apply your logic and invective to Google a thousand times over.

    But you're not consistent.

    reply to this | link to this | view in chronology ]

    • icon
      Karl Bode (profile), 14 Oct 2015 @ 11:20am

      Re: If you were consistent would apply your logic and invective to Google a thousand times over.

      reply to this | link to this | view in chronology ]

      • icon
        Zgaidin (profile), 14 Oct 2015 @ 1:03pm

        Re: Re: If you were consistent would apply your logic and invective to Google a thousand times over.

        I'll admit that I think TD sometimes gives Google more of a pass that it deserves for some of it's snoopy practices, and I say this as someone who uses G+, Gmail, Google Calendar, and Google Drive.

        That said, there are two extremely important differences between Google and Verizon (or AT&T or Comcast, etc.)

        1. If you think Google is nefarious, you can choose to use another provider for web-search, e-mail, etc. OTOH, most people cannot choose another ISP. If (or when, as you prefer) they are scummy, nefarious, or diabolical you can either suck it up or go without internet service.

        2. Google, and most other widely-used content providers make their money by advertising. You may disagree with the practice, but you must at least admit they have a market-conscious reason for wanting your data, so they can provide more targeted ads, so they can charge more for ads. But Verizon customers, in theory, pay Verizon a monthly fee for use. Typically if I pay you X dollars for Y good/service, and you provide Y, the transaction is over. So, what valid market reason do ISPs have for scooping up this data?

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Oct 2015 @ 11:37am

      Re: If you were consistent would apply your logic and invective to Google a thousand times over.

      Or your obsessed with some imaginary Google boogeyman, that for some strange reason no one else can see.

      reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 15 Oct 2015 @ 12:03am

      Re: If you were consistent would apply your logic and invective to Google a thousand times over.

      Oh, really, you're now trying to dirty my handle with your idiocy? Am I your new obsession when you're not making stories up about Mike? I'm honoured.

      What a sad, pathetic, lonely life you must leave if this is how you get your kicks.

      reply to this | link to this | view in chronology ]

      • icon
        Ninja (profile), 15 Oct 2015 @ 7:18am

        Re: Re: If you were consistent would apply your logic and invective to Google a thousand times over.

        Do you have any incursions in the musical field like Marcus? That made him a target of obsession from the fans for months!

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Oct 2015 @ 10:54am

    The Market is Self Regulating - this and other bullshit mantras provided to you by your friendly transparent corporate PR dept.

    If repeated enough, it eventually becomes "true"

    Your call is important to us
    We respect your privacy
    Our employees are our greatest asset
    How can I help you

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Oct 2015 @ 10:55am

    The only trust I have in Verizon is that I trust them to find some new way to screw over unlimited use-oh look they're increase the bill for unlimited users by $20 for no reason. Yep, there it is. There's that trust.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Oct 2015 @ 10:56am

    The only trust Verizon has is antitrust.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Oct 2015 @ 11:21am

    We don't need laws either.

    Social pressure will keep people honest. Just like the market will keep companies honest. Honest!

    reply to this | link to this | view in chronology ]

  • icon
    Mason Wheeler (profile), 14 Oct 2015 @ 11:34am

    He actually did a pretty good job of describing how the free market can keep bad actors in line. It really does work that way.

    Trouble is, telecom isn't a free market. And when conditions of freedom don't exist in the marketplace, because the industry is dominated by anticompetitive actors, then free market principles break down and you need a completely different toolset--monopoly economic principles--to correctly analyze it.

    reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 14 Oct 2015 @ 12:52pm

      Re:

      "It really does work that way."

      It can, certainly. But it fails to work that way often enough that it is a mistake to rely on it.

      reply to this | link to this | view in chronology ]

    • icon
      Karl Bode (profile), 15 Oct 2015 @ 6:26am

      Re:

      "He actually did a pretty good job of describing how the free market can keep bad actors in line. It really does work that way."

      Unless his comments were more in depth than what AOL-owned TechCrunch reported, he generally just waves his hand in the general direction of accountability and suggests everything will just kind of work out.

      "Trouble is, telecom isn't a free market. And when conditions of freedom don't exist in the marketplace, because the industry is dominated by anticompetitive actors, then free market principles break down and you need a completely different toolset--monopoly economic principles--to correctly analyze it."

      Absolutely. Whether it's Verizon's domination over the last mile for fixed line broadband, or the duopoly retail power it enjoys with AT&T over wireless (and backhaul), we're talking about an entirely different potato.

      reply to this | link to this | view in chronology ]

  • icon
    Martin Cohn (profile), 14 Oct 2015 @ 12:23pm

    AOL TL;DR

    We're scumbags, don't trust us.

    reply to this | link to this | view in chronology ]

  • icon
    John Fenderson (profile), 14 Oct 2015 @ 12:50pm

    Then stop

    “Data is oil for this economy,” Armstrong said. “Oil can be used really well, and oil can be used really poorly."


    If that's the case, then stop stealing my goddamned oil.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Oct 2015 @ 1:36pm

    Tim, your clumsy oil comparison/example doesn't fit here anymore than your company AOL does in the "future" in any capacity, especially as a cheerleader for Verizon. They've been busted for their highly questionable activities as you well know. The future is now by the way, so retire that phrase like AOL's importance was back in the late 90s

    reply to this | link to this | view in chronology ]

  • identicon
    Zonker, 14 Oct 2015 @ 2:24pm

    I expect it won't be long before Malibu Media signs on to Verizon/AOL's advertising network in order to collect all the subscriber information they tried to obtain through subpoena by using this stealth cookie (UIDH) data instead. No need for a subpoena to identify extortion targets, and Verizon profits from the "advertising" deal.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 Oct 2015 @ 7:44am

    There is a way to circumvent it using a vpn or a proxy.
    That said, using a vpn for your phone is a little excessive, but apparently necessary

    reply to this | link to this | view in chronology ]


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