• by Wendy Davis , 2 hours ago

A federal appellate court has upheld Verizon's $47 million privacy fine for sharing wireless customers' location data.

The ruling, issued Wednesday by a three-judge panel of the 2nd Circuit Court of Appeals, grew out of the Federal Communications Commission's April 2024 order fining T-Mobile, Verizon and AT&T for selling access to customers geolocation data to aggregators that resold the data. (The FCC fined AT&T $57 million and T-Mobile's $92 million.)

The carriers paid the fines, then sued to vacate them. Verizon sued in the 2nd Circuit, while T-Mobile brought suit in the D.C. Circuit and AT&T sued in the 5th Circuit.

The carriers made similar arguments in the three appellate courts. Among other contentions, the carriers said the location data at issue wasn't subject to confidentiality rules because it was not “customary proprietary network information.” The companies also said the FCC violated their right to a jury trial by acting as prosecutor and judge.

The 5th Circuit accepted AT&T's argument, ruling that the FCC's imposition of a fine violated the company's 7th Amendment right to a trial by jury, but the D.C. Circuit came to the opposite conclusion and upheld T-Mobile's fine.

The 2nd Circuit, like the D.C. Circuit, sided with the FCC.

Verizon had argued to the 2nd Circuit that the Communications Act only protects location data that directly relates to voice calls. The company said the location data provided to aggregators came from its “location-based service” program, which obtains geolocation data from cell towers, and then provides that data to companies like Life Alert or AAA. That cell-tower data, according to Verizon, is not “customer proprietary network information” because it's obtained whenever devices are turned on, regardless of whether customers are making phone calls at the time.

The 2nd Circuit rejected that argument, writing that the location data at issue "qualifies as customer proprietary network information" and triggers the Communication Act's privacy protections.

The appellate court also said Verizon's right to a jury trial wasn't violated because the company could have refused to pay the fine, and then defended itself at a jury trial if the FCC pressed to collect the money.

"Assuming Verizon has a Seventh Amendment right to a trial by jury, those rights were not violated because it had, but chose to forgo, an opportunity for a ...trial," the panel wrote.

The FCC initially proposed the fines in 2020 -- around two years after it came to light that a Missouri sheriff used geolocation data provided by Securus Technology to track other law enforcement officers, without court orders. Securus obtained the location data from the phone carriers. Around one year later, Vice Media's Motherboard detailed how a journalist was able to pay a “bounty hunter” $300 to track a phone's location to a neighborhood in Queens.

The major U.S. carriers have said they no longer sell location data.