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The FCC's track record on essentially meaningless fines

That $200 million sounds like a lot of money, but everything's relative.

FCC chairman Ajit Pai

The FCC fined the four major carriers over $200 million for selling customer location data without permission. "This FCC will not tolerate phone companies putting Americans' privacy at risk," chairman Ajit Pai said in statement.

Photo: David Paul Morris/Bloomberg via Getty Images

Even before the FCC announced Friday that it's fining the four biggest U.S. wireless phone companies $208 million for selling access to real-time location data of their customers without their permission, critics were already slamming the fines as too low.

In a statement Thursday, Sen. Ron Wyden called the proposed fines "comically inadequate fines that won't stop phone companies from abusing Americans' privacy the next time they can make a quick buck," and in a tweet, he reiterated the need for privacy legislation.

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The wireless carriers had continued to share their customers' coordinates even after telling members of Congress they would stop, prompting an investigation by the Federal Communications Commission, according to the Wall Street Journal.

Let's put the proposed fines in perspective.

  • T-Mobile: $91 million fine, which is less than 70% of the $131 million it brought in each day in the fourth quarter.
  • AT&T: $57 million, or a little more than a tenth of the $514 million in daily revenue it brought in during the fourth quarter.
  • Verizon: $48 million, which is 12% of the $382 million in revenue it had each day in the fourth quarter.
  • Sprint: $12 million, or 21% of the $57 million in daily revenue it had in the third quarter.

It's not the first time — and probably won't be the last — that FCC fines have been criticized for not being enough of a deterrent against future violations.

Other FCC fines that have been called toothless or inadequate include the following:

  • In 2012, Google had to pay $25 million over Street View's collection of personal data from unprotected wireless networks. The FCC also said the company impeded its investigation. The fine was equivalent to 68 seconds of profit for the giant tech company, ProPublica noted then.
  • In 2014, Sprint had to pay $7.5 million because the FCC found the company failed to honor people's requests not to be called by telemarketers. At the time, the commission called it a record fine. In the fiscal year that included that period, that works out to around 0.022% of Sprint's annual revenue of $34 billion.
  • In 2015, the FCC fined AT&T $25 million after some of its call center workers accessed and sold customers' personal information. That's equivalent to around 0.017% of the company's $146 billion revenue that year.
  • In 2018, the FCC announced what it called the largest civil penalty ever paid to the U.S. Treasury as a result of an investigation by the commission: $614 million imposed on Verizon over its company Straight Path's failure to use spectrum that was assigned to it. It remains the largest fine ever paid as a result of an FCC action. Still, the amount was around 0.46% of Verizon's 2018 revenue of $131 billion.
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