The Supreme Court has upheld more than $100 million in privacy-related fines against Verizon and AT&T, ruling 8-1 that the Federal Communications Commission (FCC) acted within its authority when it penalized the carriers for failing to safeguard customer location data.
In Thursday's decision, the justices rejected Verizon and AT&T's argument that the FCC's enforcement process violated their Seventh Amendment right to a jury trial.
Chief Justice John Roberts, writing for the majority, said the companies retain the option to refuse to pay and force the government to seek enforcement in federal court, where a jury would be available, meaning their constitutional rights were not infringed, according to The Hill.
The ruling preserves one of the FCC's key tools for policing privacy and other communications rules, siding with the Trump administration, which had defended the agency's in-house penalty system.
The underlying dispute stems from FCC findings that the carriers failed to adequately protect highly sensitive customer location information and, in some cases, allowed outside firms to obtain it without proper consent or safeguards.
The agency concluded that these practices violated provisions of the 1996 Telecommunications Act requiring phone companies to protect the confidentiality of customer data.
As part of a broader enforcement sweep targeting location-data abuses, the FCC levied about $57 million in fines against AT&T and nearly $47 million against Verizon, for a combined total of roughly $100 million, The Register reported.
Verizon and AT&T challenged the penalties in multiple federal appeals courts before asking the Supreme Court to step in. The companies contended that having the FCC investigate and set fines internally, before any access to a jury, unconstitutionally blended prosecutorial and adjudicatory powers within the agency.
While some lower courts had sided with the FCC and others had questioned parts of its approach, the Supreme Court's ruling resolves that split in favor of the regulator's current framework.
The decision has implications beyond Verizon and AT&T, reinforcing the ability of federal regulators to bring large enforcement actions over privacy, robocalls, and related communications issues without immediately going to a jury trial.
The FCC has separately imposed major fines on other carriers, including T-Mobile and Sprint, over alleged mishandling of location data, as per ABC News.
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