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Verizon – User Privacy (2020)

Verizon – User Privacy (2020)

Outcome: Pending

Verizon is able to track how long people stream music, play online games, or use social media. It can tell whether a user shops at high-end expensive stores, is visiting online dating sites, or what news outlets they spend more time reading. It knows wireless-device location and internet protocol addresses. In short, Verizon has legally permissible access to enormous amounts of user information.

That information can be legally valuable and revenue generating for the company depending on how it is used and which third-parties are allowed to use it.

In 2018, following revelations from US Senator Wyden that about 75 companies had access to Verizon customers’ locations, the company announced it would wind down those relationships.

While the tech industry refuses to scan emails for information to sell to advertisers, Verizon unit Oath reportedly continues to do so and pitches these services to advertisers.

In March 2019, the Federal Trade Commission issued orders to seven U.S. Internet broadband providers, including Verizon, seeking information the agency will use to examine how these companies collect, retain, use, and disclose information about consumers and their devices.

“The FTC is initiating this study to better understand Internet service providers’ privacy practices in light of the evolution of telecommunications companies into vertically integrated platforms that also provide advertising-supported content. Under current law, the FTC has the ability to enforce against unfair and deceptive practices involving Internet service providers.”

In May 2019, Verizon and other wireless carriers were sued in Federal court for allegedly violating customers’ privacy rights by selling geolocation data to third parties.

In addition to Federal interest and litigation, some states are drafting rules limiting how broadband-customer data can be used.

According to a September 2019 Harris-IBM poll, 83 percent of US consumers said that if a company shares their data without their permission, they will not do business with them.

Resolved: Verizon shareholders request the Human Resources Committee of the Board of Directors publish a report (at reasonable expense, within a reasonable time, and omitting confidential or propriety information) assessing the feasibility of integrating user privacy protections into the Verizon executive compensation program which it describes in its annual proxy materials. This proposal does not seek greater disclosure or information regarding cybersecurity (the criminal or unauthorized actions), but rather is focused on legally permissible and permitted uses of data.

Supporting Statement: According to page 37 of Verizon’s 2019 proxy materials, the Verizon Short-Term Plan included adjusted EPS, free cash flow, total revenue, and diversity and sustainability. According to page 41 the Long-Term Plan is focused on total shareholder return, free cash flow, and retention. User privacy and how user data is used are vitally important issues for Verizon and should be included in executive compensation plans, as we believe it would incentivize top leadership to respect user privacy, enhance financial performance, reduce risks, and increase accountability.

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