Briefly, supercookies are tracking devices that Verizon adds to your web traffic from your phone after the traffic leaves your phone but before it reaches the intended web site.
Verizon uses this traffic to figure out what sites you visit and paint a complete picture of you (you visit REI and Starbucks and Bank Of America) to sell to advertisers. Advertisers themselves figured out that they could use this data if they have multiple brands to track customers and see what kind of cross marketing they could do. In addition, since you log in to one of these sites, they now know your name (and everything else about you) on all of these sites. Advertisers were particularly interested in this because pesky consumers sometimes have the nerve to delete tracking cookies or block them completely. Even privacy enhanced browsers fail at protecting you from these supercookies.
When AT&T got caught doing this, they immediately said “my bad”, made up some excuse that they were testing this and stopped doing it.
Verizon, on the other hand, said advertisers would never use the data that way and we never sell your data – just your usage patterns – and generally resisted the fact that they got caught with their hand in the cookie jar.
In addition, several senators have asked the FCC to investigate.
Well finally, they have come up with a mechanism for you to opt out of this tracking. What is not clear is whether they stop adding a UIDH tracking header to your traffic or merely stop selling your data. In either case, you can at least opt out to some degree.
To opt out, you can go to the privacy options on your personal Verizon web page (here) or call their customer service at 866-211-0874.