The Ability of the FCC to Issue Fines

We are definitely entering into a new era in regulation. Verizon, AT&T, and T-Mobile are disputing the Federal Communications Commission’s (FCC) ability to levy fines on them. The fines in question all stem from an FCC action to penalize the carriers for selling customer location data to aggregators. This data allows marketers to become intimately knowledgeable about where people spend their time every day. In the majority of cases, the carriers did not get permission from customers to share their data. The FCC started the process of assessing the fines under Chairman Ajit Pai, who proposed the fines and said the carriers’ actions are a violation of customer privacy. The three carriers are making roughly the same basic arguments. AT&T and Verizon are both arguing that the Supreme Court’s ruling in Securities and Exchange Commission v. Jarkesy means that the FCC has no ability to levy fines and that the companies are entitled to a jury trial. The carriers must be hoping the suits get dropped. This does not seem an issue that the carriers would ever want to take to a jury—that could likely impose much larger penalties on the carriers. If these cases don’t make it to fruition, the courts are going to have to further test the idea in other suits that administrative agencies can’t impose fines. For now, the ability for the FCC to impose fines is in hanging in limbo.