The Federal Communication Commission has superimposed $200 million in the form of fines against wireless carriers over alleged user data violation.

The Background

The FCC has proposed the fines over charges that the carriers failed to satisfactorily protect customer’s location data by disclosing their location information without proper permission and then continuing to sell access to data without appropriate safety measures. The FCC also stated that all four (4) carriers had sold access to customer’s locations to various aggregators and, in the same vein, resold access to such information to a third-party location-based service provider.

The enforcement bureau of the Federal Communication Commission kicked off the investigation on this issue in 2018, following the reports that wireless companies were giving out customer’s location information to aggregators who then resell access to such data to specific third parties. As a result of these firsthand reports, the carrier companies involved mentioned that they would cease the sales of access such information to data brokers.

Despite the promise not to sell such information, it was released in the press that carriers continued selling customer’s location information without setting up reasonable safeguards and also obtaining the consent of the customers. The Federal Communication Commission also claims that it took decisive steps to protect the customer (in America), and they are fully persuaded that a balance has been struck in this case. Although, some of the Democrats of the Federal Communication Commission are not in full support of how the fines are calculated (as we would see shortly). It has been tagged “comically inadequate,” claiming that the amount that could be potentially owed by the carriers has been heavily discounted. Therefore, a proper consumer remedy should be put in place to consider the number of affected consumers even after been reported that they would emerge soonest.

Why Users Location Data Matters

The chairman of the Federal Communication Commission, Ajit Pai said announced the proposed fines imposed on the world’s largest wireless carriers for sharing customers’ locations with third parties without observing proper safeguards. This becomes a matter of concern that mirrors the FCC’s assessment that the carriers broke the law by giving out customer’s real-time location information, which motherboard made its way to bounty hunters in some cases. These proposed fines are the beginning of law enforcement, and it isn’t final. As soon as the carrier companies respond to the issue on the ground, a need for a final decision for the fines would arise, and it becomes the duty of the Justice Department to collect the money if the company is reluctant to pay.

It’s important to point out that not all propose penalties or fines do move to a final stage. A good example is the $100 million imposed on AT&T by the Federal Communication Commission in 2015 for slowing down customer’s download speed of unlimited data.

Allocation of Fines by their Numbers

The fines affect four major companies on allegations that they violated rules that require carriers or those acting on their behalf to obtain affirmative, express consent from a customer before using, disclosing, or allowing access to this information.

  • AT&T – $57 Million
  • Verizon faces $48 Million
  • T-Mobile about $91 Million
  • Sprint roughly $12 Million

However, it is important to note that these propose fines can be challenged by the carrier companies involved before a conclusion arrives. Also, from the fines, it can be observed that they are not equally distributed among the companies. The major factor responsible for this uneven distribution of the calculated fines is the actual number of companies the information is sold to, coupled with the length of time. We can pinpoint from the calculated fines by the Federal Communication Commission that the largest fine amounting to $91 Million was imposed on T-Mobile. Although, the company has the intensions of challenging such amount as it claims that it terminated its location aggregator program in February 2019 after making sure that important and correct services were not adversely impacted.

Criticism and Final thought

The chairman of the commission guaranteed that the FCC would not tolerate the lives of Americans being put at risk by abusing their privacy. He also stated that these carrier companies were being investigated as far back as 2007; therefore, precautionary safety measures on customer’s privacy must be taken by carrier companies to avoid stringent enforcement action.

On the other hand, the FCC has faced several criticisms for being sluggish to ensure enforcement of these penalties prior to this time. Summarily, the wireless/mobile industry needs to be regulated appropriately. The Chief Executive Officer of the location data company Foursquare also suggested that customer’s location information should not be easily accessed using phone or computer applications without a prior and proper knowledge of the customers/users. Therefore, any contrary act is a complete breach of the law, and the Federal Communication Commission will be eager to hold involved carriers accountable justly. Consumers have no choice but to share extremely private information with a provider about their privacy in order for them to obtain their cellular service. Still, the carrier companies are not permitted to turn around and trade the location information to anyone with some buck to spend. However, such customer data can be given out to valid clients on lawful grounds. Clients like roadside aid services, bank fraud-detection departments, and law enforcement agencies can be allowed to gain access to customer’s location data for legal purposes. Although, this case sounds like it addresses the issue of “safeguards” more than “why such private information is being sold,” and we should also hope the involved carrier companies would not increase their tolls to cover the fines/charges and sustain the business. However, there is an urgent need to finalize the consequence of this violation of customer’s privacy to avoid the continuous access to customer’s location data by those who can easily put customers’ lives at risk.