Court rejects Verizon claim that selling location data without consent is legal

Verizon has faced a significant legal setback as the US Court of Appeals for the 2nd Circuit has upheld a hefty fine of $46.9 million imposed for selling customer location data without obtaining user consent. This ruling, delivered unanimously by a panel of judges, dismisses Verizon's challenge against the fine, affirming the Federal Communications Commission's (FCC) authority in the matter. The fine is part of broader regulatory actions taken against major telecommunications companies last year, following violations that came to light in 2018. While AT&T successfully contested a similar penalty in the more conservative 5th Circuit, T-Mobile encountered setbacks in the District of Columbia Circuit. The differing outcomes among circuits may increase the likelihood of the Supreme Court reviewing these cases. Despite a dissenting vote from FCC Chairman Brendan Carr during the Democratic majority's decision, the agency has urged the courts to uphold the penalties established during the Biden administration. The 2nd Circuit's ruling aligns with the conclusions reached in the T-Mobile case, reinforcing the notion that customer data qualifies as protected information under the Communications Act. Verizon argued that the fine infringed upon its Seventh Amendment rights concerning jury trials, as well as claiming that the data in question was not subject to the FCC's regulations. However, the court firmly rejected these arguments, stating that Verizon had previously opted not to pursue a jury trial and that the penalty was justly imposed within legal frameworks. The ruling also highlighted Verizon's previous operations of a 'location-based services' program, where the company sold access to wireless customer location data through partnerships with aggregators like LocationSmart and Zumigo, which supplied the data to numerous third-party service providers.