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FCC to propose $200 million fines for U.S. cellphone carriers over consumer data disclosures

Stock MarketsFeb 27, 2020 05:26PM ET
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© Reuters. A man stands next to the logo of Verizon at the Mobile World Congress in Barcelona

By David Shepardson

WASHINGTON (Reuters) - The U.S. Federal Communications Commission is set to propose fining four major U.S. mobile phone companies at least $200 million in total for improperly disclosing some consumer real-time location data, two people briefed on the matter said on Thursday.

The FCC is expected to announce the proposed fines on AT&T Inc (N:T), Verizon Communications Inc (N:VZ), Sprint Corp (N:S) and T-Mobile US Inc (O:TMUS) on Friday. The companies will be able to challenge the fines before they become final and the precise amount could change the sources said, but is expected to total just over $200 million.

FCC Chairman Ajit Pai confirmed in January that "one or more wireless carriers apparently violated federal law." The FCC and the carriers did not immediately comment.

The FCC said in May 2018 it was investigating reports that a website flaw could have allowed the location of mobile phone customers to be tracked. That probe expanded into other uses of consumers' location data by third-party firms.

Carriers have allowed the use of location-data for programs like roadside assistance, logistics, medical emergency alert services, human trafficking alerts and fraud prevention.

FCC Commissioner Jessica Rosenworcel said in January it was a "shame" the FCC took so long to act on what she called reports that "shady middlemen could sell your location within a few hundred meters based on your wireless phone data." She added, "It’s chilling to consider what a black market could do with this data."

A trade group representing U.S. wireless carriers said in January that "upon hearing allegations of misuse of the data, carriers quickly investigated, suspended access to the data and subsequently terminated those programs."

Lawmakers last year expressed outrage that aggregators were able to buy user data from wireless carriers and sell "location-based services to a wide variety of companies" and others, including bounty hunters.

Senator Ron Wyden, a Democrat, said Thursday that media reports of the fines suggested Pai "failed to protect American consumers at every stage of the game – this issue only came to light after my office and dedicated journalists discovered how wireless companies shared Americans’ locations willy nilly."

Wyden said the fines would be a significantly less than what the FCC could have imposed and said "comically inadequate fines" will not "stop phone companies from abusing Americans’ privacy the next time they can make a quick buck."

T-Mobile, which it expected to face the largest fine, is working to close its merger with Sprint in the coming weeks.

FCC to propose $200 million fines for U.S. cellphone carriers over consumer data disclosures
 

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