T-Mobile next month plans to automatically enroll its customers into a program that will allow the operator to sell the details of its customers' web and app activities to advertisers.
"We've heard many say they prefer more relevant ads so we're defaulting to this setting," a T-Mobile representative told the Wall Street Journal, which first reported the change. Customers who don't want T-Mobile to sell their data to advertisers must dig into their account settings in the operator's website or app.
Importantly, T-Mobile said it will hide its customers' identities, and will instead provide to advertisers anonymous information about their online activities. The carrier also will not activate the service for business users or children.
AT&T and Verizon have both already made extensive investments into the sale of their customers' online data. For example, AT&T purchased AppNexus in 2018, while Verizon purchased AOL and Yahoo in 2015. However, both companies have since backed away from the space, with AT&T reportedly looking to sell its Xandr advertising division and Verizon writing down the value of its online purchases.
More broadly, T-Mobile, AT&T and Verizon are looking to score a piece of the massive online advertising pie that companies like Google and Facebook have dominated. After all, Facebook and Google make the bulk of their profits by selling information on the behavior of their users to advertisers. Such targeted information is highly prized by companies selling everything from cars to wristwatches.
Of course, the sale of customers' online data – whether obtained explicitly or through their inaction – is a space rife with pitfalls. For example, The New York Times reported on its acquisition of the location data of roughly 130 smartphone users involved in the January storming of the US Capitol by supporters of former President Trump. The data the publication received did not include the users' identities, but the publication was nonetheless able to connect dozens of devices to their owners. Similarly, Motherboard recently reported on the US military's purchase of location data from smartphone apps including a Muslim prayer app as well as a Muslim dating app.
Partly in response to outrage over such reports, some companies have sought to back away from the sale of their customers' data. For example, search giant Google is in the process of phasing out third-party cookies on its Chrome web browser to track Internet users as they scamper across the web, and recently said it also won't use alternative tools for tracking individual web users.
But the issue is particularly critical for mobile network operators, which run networks that, by necessity, must track the location and activities of smartphone users. And their track record in protecting that data is muddy at best. For example, reports in 2019 indicated location data aggregators like LocationSmart allowed anyone to obtain real-time location information for any mobile device from AT&T, Verizon, T-Mobile and Sprint. The issue sparked investigations by regulators, and promises by operators to cease the sale of their customers' location data to such aggregators.
But the prospect of joining Facebook, Google and others in the sale of customer data to advertisers seems too tempting to relinquish, based on T-Mobile's latest actions.
There have been some attempts by the mobile industry to address the issue head on, rather than quietly updating their customer privacy policies, as T-Mobile has done. For example, the global mobile industry's main trade association, the GSMA, last year announced a test with the software company Streamr to test a service that would allow mobile network operators to "to monetise their user data ethically."
The test – designed to be attractive to operators, users and regulators – involves customers explicitly opting in to the sale of their online data in order to receive a share of the resulting profits.
The companies have not yet announced the results of the test.
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