Court rules that the FCC lawfully fined T-Mobile over improper use of location data
T-Mobile must pay a $92 million fine that includes a $12 million penalty imposed on Sprint.
This story starts in April 2024, when T-Mobile, Verizon, and AT&T were fined by the FCC for selling location data to aggregators who shared it with third-party location-based service providers. The fines, which were originally handed out in 2020, were finalized four years later. Sprint was told to pay $12 million, T-Mobile $80 million, AT&T $57 million, and Verizon $48 million. Last year, T-Mobile decided to appeal the $92 million fine (which included Sprint's fine as well).
Last Friday, the U.S. District Court of Appeals made its ruling, and it decided in favor of the FCC. In other words, the court said that the regulatory agency followed the law by fining both T-Mobile and Sprint for selling their location data to the middlemen who passed it to third-party service providers. The carriers were blamed by U.S. District Court Judge Florence Pan for failing to uphold their responsibilities to protect their customers by preventing misuse of location information by third parties.
The judge said that Sprint and T-Mobile did not take prompt action to protect the location data, even after they both became aware that this information was being abused. In her decision, Judge Pan wrote that T-Mobile and Sprint do not deny the facts of the case but believe that there was no violation of the law. The carriers argued that the FCC misinterpreted the Communications Act, calculated the fines incorrectly, and did not allow them to have a jury trial, thus violating their Seventh Amendment rights. The judge wrote that the carriers' arguments "lack merit" resulting in the court's decision to side with the FCC.
"This is a huge win for privacy and for everyone who owns a cell phone. Location data is one of the most personal and sensitive types of data and is particularly harmful in the hands of bad actors. It is important the FCC continues to remain vigilant against this type of behavior"
-Eric Null, co-director of the Privacy and Data Project at the Center for Democracy and Technology
T-Mobile responded to the ruling by releasing a statement that said, "We discontinued our location-based services program more than six years ago. We are currently reviewing the court's action and don’t have anything new to add at this time."
On the other hand, those advocating for consumer privacy were very happy with the ruling. Eric Null, co-director of the Privacy and Data Project at the Center for Democracy and Technology, told Fierce Wireless, "The DC Circuit's welcome decision rejects Sprint and T-Mobile’s arguments that they should not be held accountable for their willingness to sell off customers’ location data to the highest bidder and violate the law."
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