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FCC proposes largest fine in decades against phone companies

by Joe Tomlinson
Thu, Mar 26th 2020 04:00 pm
On Feb. 28, the FCC proposed $200 million in fines against the four major phone companies, but many think its efforts are inadequate.
On Feb. 28, the FCC proposed $200 million in fines against the four major phone companies, but many think its efforts are inadequate.

The Federal Communications Commission (FCC) has proposed that major fines be levied against several large phone companies as a result of claims they have not protected the privacy of U.S. cellphone users. 

The suggested fines would force these companies to pay out more than tens of millions of dollars as punishment. Such measures have been taken due to y ears of reports from consumers stipulating ho w companies like Verizon, Sprint, T-Mobile and AT&T sold users geolocation data to third parties without their consent. 

“The proposed fines by the F ederal Communications Commission amounted to $91 million for T-Mobile, $57 million for AT&T, $48 million for Verizon and $12 million for Sprint,” the Los Angeles Times reported. “The amounts vary based on ho w long each company sold the user data and how many companies and organizations it sold the data to. The p hone companies can object, and the amounts could change.” 

In total the fines exacted against the four major American phone companies add up to $200 million. Although the amount may seem big, many people feel as though the proposed FCC fine is too late and too small to properly address the magnitude of privacy issues. 

“Instead of meeting its obligation to come down hard on the wireless carri ers that are guilty in this case, the FCC dragged its feet and issued penalties that let these companies off easy,” said Sen. Edward Markey (D-Mass.). 

The problem is not that these compa nies were selling the data, it is malpractice because of who they were selling it to. They sold access to personal location data to lit tle-known companies that operated as data brokers, or to middlemen called “location aggregators.” These brokers and middlemen would then make user information available to third parties. The FCC claims the phone companies refrained from getting the customer consent to sell their data to aggregators and failed to protect users from unauthorized access to their information. 

During a press conference, FCC chair man Ajit Pai commented on the proposed fines, “the FCC has long had clear rules on the books requiring all p hone companies to protect their customers’ personal informa tion,” Pai said in an accompan ying release. “And since 2007, these companies ha ve been on notice that they must take reason able precautions to safeguard this data and that the FCC will take strong enforcement action if they don’t. Today, we do just that.” 

In anticipation of Pai’s announcement of the fines from the FCC, Sen. Ron Wy de from Oregon called the alleged proposals weak and insufficient. 

“He [Pai] only investigated after public pressure mounted,” Wyden said. “And now his response is a set of comically inad equate fines that won’t stop phone companies from abusing Americans’ privacy the next time they can make a quick buck.” 

Currently, Verizon has not responded or commented on the proposed fines, AT&T has declined to speak on the fines until they have fully reviewed the FCC’s accusations. Sprint responded by reaffirming its commitment to protecting its customers’ privacy and stating that they w ould review the allegations. T-Mobile was the first to double down and commit to pushing back against the FCC. 

Since the announcement of the fines, several people and lawmakers have characterized the fines as a slap on the wrist that let the major p hone companies off the hook. Although some of the companies ma y fight back, in reality the fines amount to a drop in a bucket. If the go vernment and these companies truly care about customer privacy, they will take a principled stance and develop legislation that protects users from unwarranted use of their data. 

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