Bloomberg News

Wireless Companies to Face New U.S. Disclosure Rules in Bill

February 01, 2012

(Adds Carrier IQ comments in ninth paragraph.)

Jan. 30 (Bloomberg) -- Mobile carriers such as AT&T Inc. and makers of wireless devices including HTC Corp. would be required to disclose when phones contain monitoring software under draft legislation in the U.S. House.

The proposed measure released today responds to concerns of lawmakers who learned last year that mobile-phone software provider Carrier IQ Inc. gathered data on wireless phone users.

“Consumers have the right to know and to say no to the presence of software on their mobile devices that can collect and transmit their personal and sensitive information,” Representative Ed Markey, a Democrat from Massachusetts who wrote the bill, said in a statement.

Carrier IQ, based in Mountain View, California, sparked a debate on the collection of mobile-phone user data and consumer privacy. European regulators started investigating the company’s software after a security researcher posted a 17-minute YouTube video Nov. 28 detailing data logs collected by Carrier IQ.

The disclosure requirements in Markey’s draft bill would apply to companies that make or sell mobile phones, providers of telecommunications services and businesses that let consumers download software with monitoring capabilities.

The Federal Trade Commission would be required to issue regulations requiring those companies to get consent from consumers before any software begins collecting and transmitting data, according to the draft.

Companies would be required to disclose the existence of monitoring software when a consumer buys a mobile phone or after a sale when the software is later installed.

Disclosure Concern

The disclosure must specify that the monitoring software has been installed; the types of information collected; the identity of a third party to which information is transmitted; and how data is used, according to the draft.

Andrew Coward, vice president of marketing for Carrier, said phone companies have the option to activate or not use Carrier’s software.

“Utilizing this option is a decision for each network operator balancing a number of factors including the critical need to ensure optimal network and device performance and consumer concerns about privacy,” Coward said.

The company said in a Dec. 12 report on its website it had discovered a software bug that allowed collection of some user text message data. Carrier IQ said the data was unreadable and that it didn’t gather or transmit the contents of e-mails, keystrokes or any details from mobile phone users’ address books. The company said its software allows collection of URLs, which may include online search histories.

--Editors: Steve Walsh, Michael Shepard

To contact the reporter on this story: Chris Strohm in Washington at cstrohm1@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net


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