FCC Fines Telcos for Selling Location Data
A Slap on the Wrist?
- FCC fines major US telcos $196 million for selling customer location data.
- Penalties, stemming from actions first revealed in 2019, seen as minor compared to telcos’ profits.
- Privacy violations highlighted by FCC chairwoman amid slow regulatory response.
- Rise of privacy-first mobile operators like Cape in response to ongoing privacy concerns.
Five Years Late and $196 Million Short
In a saga that began over five years ago, the Federal Communications Commission (FCC) has finally fined major US telecom operators a total of $196 million for illegally selling customer location data. For giants like T-Mobile, AT&T, and Verizon, these fines are more symbolic than financially crippling.
Breaking Down the Fines
T-Mobile is hit hardest, shouldering $92 million, including $12 million for Sprint’s past actions. AT&T and Verizon follow with fines of over $57 million and almost $47 million, respectively. Given that the FCC had signaled these fines in 2020, it’s likely the companies had long since accounted for them in their financial plans.
The Privacy Breach
This story traces back to a 2019 article by Motherboard, which exposed that telcos were selling location data to aggregators. These middlemen, in turn, passed the data on to various buyers, from bounty hunters to car salesmen, all without user consent. The practice only stopped once it was publicly revealed.
FCC Chairwoman Jessica Rosenworcel emphasized the sensitivity of geolocation data, underscoring the potential for misuse when such data lands in the wrong hands. The violations, she noted, breached Section 222 of the Communications Act, which safeguards consumer data privacy.
The Regulatory Delay
Questions remain as to why it took so long to penalize these breaches. The 2020 election and subsequent delays in appointing a full FCC commission may have played a role in the protracted timeline.
Rise of Privacy-Focused Alternatives
This case has fueled interest in privacy-first mobile services like Cape, which recently raised $61 million in funding. Cape positions itself against the traditional telco model, emphasizing minimal data collection. CEO John Doyle criticized the monetization of personal data, likening telcos to social networks that profit from user information.
In conclusion, while the fines mark a regulatory victory, they also highlight ongoing concerns over data privacy and the slow pace of enforcement. For customers, this could mean a shift toward services that prioritize privacy over profit.
