Court Rules Verizon Can’t Sell User Location Data Without Consent
▼ Summary
– Verizon’s attempt to overturn a $46.9 million fine for selling customer location data without consent was rejected by the US Court of Appeals for the 2nd Circuit.
– The Federal Communications Commission fined three major carriers last year for violations revealed in 2018, leading to lawsuits in different courts with varying outcomes.
– Different court rulings across circuits increase the likelihood of these cases being taken up by the Supreme Court, which could impact the FCC’s penalty authority.
– The court unanimously ruled that customer location data qualifies as protected information under the Communication Act and rejected Verizon’s Seventh Amendment argument.
– Verizon had operated a program selling access to customer location data through aggregators to third parties until 2019.
A major federal court has upheld a substantial penalty against Verizon for improperly selling customer location information, reinforcing the critical importance of consumer privacy rights in the digital age. The decision sends a clear message that telecommunications providers must obtain explicit consent before monetizing sensitive user data.
The US Court of Appeals for the 2nd Circuit rejected Verizon’s appeal of a $46.9 million fine originally issued by the Federal Communications Commission. The unanimous ruling from a three-judge panel found that Verizon violated communications privacy laws by selling real-time location data without user authorization.
This case is part of a broader regulatory action taken against the nation’s largest mobile carriers. Last year, the FCC issued fines to Verizon, AT&T, and T-Mobile following investigations into their data-sharing practices. The carriers responded by challenging the penalties in different appellate courts, leading to inconsistent outcomes.
While AT&T successfully overturned its fine in the 5th Circuit, and T-Mobile lost its appeal in the DC Circuit, Verizon’s defeat in the 2nd Circuit creates a legal split that may eventually draw the attention of the Supreme Court. Such a division among federal circuits often prompts higher judicial review to establish a uniform national standard.
In its defense, Verizon argued that location data should not be classified as protected customer information and claimed the fine violated its constitutional right to a jury trial. The court firmly rejected both arguments, stating that the data in question “plainly qualifies as customer proprietary network information” under existing communications law.
The judges also noted that Verizon had previously chosen to forgo a jury trial, weakening its constitutional challenge. The ruling emphasized that the FCC acted within its authority when imposing the financial penalty.
According to court documents, Verizon operated a location-based services program until 2019, selling access to customer data through third-party aggregators like LocationSmart and Zumigo. These intermediaries then provided the information to dozens of other companies, all without obtaining meaningful user consent.
The court’s decision reinforces the FCC’s role in enforcing telecommunications privacy rules and signals that companies can face significant consequences for mishandling sensitive consumer information.
(Source: Ars Technica)
