Wireless Carriers Face Penalties for Sharing Consumer Locations
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The Federal Communications Commission proposed fining the nation's four biggest wireless carriers more than $208 million for "apparently selling" real-time location data from customers to third parties without proper safeguards.
Digital privacy advocates applauded the agency's action, stressing the seriousness of the violations.
T-Mobile faces the largest fine, a proposed $91 million, while AT&T would have to pay more than $57 million, Verizon more than $48 million, and Sprint more than $12 million. T-Mobile plans to fight the fines. The three other carriers may exercise that option, too, and the FCC can reduce the fines after hearing from the companies.
“This FCC will not tolerate phone companies putting Americans’ privacy at risk," said Chairman Ajit Pai in a statement announcing the fines.
The complaint, formally called a Notice of Liability, contended that each carrier "apparently disclosed its customers’ location information, without their consent, to a third party who was not authorized to receive it." The companies sold information to LocationSmart and Zumigo, characterized as "aggregators" in the complaint.
The aggregators allegedly sold access to the customer location data to a variety of "location-based service providers" without obtaining the required consent of the consumers.
Cell phone carriers collect real-time location data from consumer's phones as they communicate with nearby cell towers searching for a signal. This information is different from a smartphone's GPS location tracking, which is simple to turn off. To disable cell tower tracking, you have to go to the phone's settings and turn off cell service or put the device in airplane mode, either of which disrupts your ability to make and receive calls.
"Geolocation data leaks are not just inconvenient; they pose safety risks to vulnerable consumers, including victims of domestic violence and members of law enforcement," says privacy expert Pam Dixon, executive director of the World Privacy Forum, a California-based advocacy group. "There are some bright lines that shouldn’t be crossed, and selling geolocation data about consumers is one of them."
Three FCC commissioners raised concerns about the nature of the investigation and the proposed fines.
"This investigation is a day late and a dollar short," wrote Jessica Rosenworcel, dissenting from the commission's action. "It took too long to get here and we impose fines that are too small relative to the law and the population put at risk."
Commissioner Jeffrey Starks voted to approve in part and dissent in part. "I am concerned that the penalties proposed today are not properly proportioned to the consumer harms suffered, because we did not conduct an adequate investigation of those harms," he wrote in a statement. "The Notices make clear that, after all these months of investigation, the Commission still has no idea how many consumers’ data was mishandled by each of the carriers."
Commissioner Michael O'Reilly voted to approve, but with "serious reservations," adding "I am concerned that we do not have all the relevant facts before us, and that we either haven’t heard or sufficiently considered counter arguments from AT&T, Sprint, T-Mobile, and Verizon."
Consumer Reports reached out to all four carriers for comment, and while all acknowledged the request, only T-Mobile provided a statement.
"When we learned that our location aggregator program was being abused by bad actor third parties, we took quick action," said T-Mobile in an e-mailed statement. "While we strongly support the FCC’s commitment to consumer protection, we fully intend to dispute the conclusions of this [Notice of Apparent Liability] and the associated fine."
Consumer advocates welcomed the proposed fines, but said it wasn't enough.
"While we appreciate the FCC fining the four largest wireless carriers for violating consumers’ privacy by selling location information without proper consent, it took far too long for the Commission to act," says Jonathan Schwantes, senior policy counsel for Consumer Reports. "This episode underscores the need for much clearer rules to prevent this sort of behavior in the future.”
Congressman Frank Pallone (D-NJ), in a press statement, called the fines "little more than the cost of doing business for these carriers," while adding, "the Commission is still a long way from collecting these fines and holding the companies fully accountable."
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