Last week, Verizon (VZ  ) announced that it was going to end its practice of sharing locations with data providers.

The announcement comes at a time when many major tech and telecommunications companies are facing increased scrutiny over their privacy policies. Earlier this year, Senator Ron Wyden, a Democrat from Oregon, wrote a letter to the four top national wireless operators, including Verizon, AT&T (T  ), Sprint (S  ), and T-Mobile (TMUS  ), inquiring after their use of customer data. All companies initiated internal reviews.

Most of the time, location data is used solely to provide a service that a customer has requested and thereby presumably consented to, or in exceptional emergency situations. However, in the course of its review, Verizon discovered that a third-party data provider, Securus Technologies, had accessed user data and sold it to law enforcement officers so that they could discover a cellphone owner's whereabouts without a court order and without the owner's knowledge or consent. Verizon's investigation revealed that Securus Technologies had obtained this information from a third-party service, which had in turn gathered it from LocationSmart, a location broker that Verizon agreed to sell data to. LocationSmart had also made public an API that allowed anyone to ask for mobile locations anonymously and without any restrictions, and permitted the release of that data without owner consent.

In its written response to Senator Wyden dated June 15, Verizon announced that it was cutting off LocationSmart and another data provider, Zumigo Inc."We conducted a comprehensive review of our location aggregator program," said Verizon CTO Karen Zacharia. "As a result of this review, we are initiating a process to terminate our existing agreements...we will not enter into new location aggregation unless and until we are comfortable that we can adequately protect our customer's location data through technological advancements and/or other practices."

AT&T, Sprint, and T-Mobile also said they had limited Securus' access to the location data of its users, but had decided to keep sharing with LocationSmart.

Many apps and companies run on data supplied by LocationSmart, running the gamut from online lottos to truck fleet trackers. Mario Proietti, the chief executive of LocationSmart, insisted that there was nothing nefarious at foot. Information given is supplied only upon request, and there is no tracking going on, according to Proietti. LocationSmart declined to reveal how often Securus was able to access information about cellphone owners through its service.

The FCC has announced that it is going to look into the matter.