US Supreme Court sides with FCC in clash with wireless carriers over fines

The U.S. Supreme Court has sided with the Federal Communications Commission (FCC) in a significant legal battle, affirming the agency's authority to impose fines through its internal proceedings. The ruling, decided 8-1, rejected challenges brought by wireless carriers AT&T and Verizon, who argued that the FCC's system deprived them of their constitutional right to a jury trial.

The dispute centered on the FCC's "forfeiture orders," a mechanism used to penalize companies. The FCC had fined AT&T $57 million and Verizon nearly $47 million for allegedly selling customer location data to third parties without user consent. In total, the agency had levied nearly $200 million in fines against carriers for failing to safeguard customer data, also fining T-Mobile $80 million and Sprint $12 million.

While Verizon and AT&T paid their fines, they pursued legal challenges, leading to conflicting decisions in lower appellate courts. The 2nd U.S. Circuit Court of Appeals in New York had supported the FCC's system, while the 5th U.S. Circuit Court of Appeals in New Orleans had ruled against it, stating it violated the right to a jury trial. The Supreme Court's intervention aimed to resolve this split.

The Justice Department, defending the FCC, argued that the agency's assessments were not final and that companies could still present their case in court if the government pursued legal action. However, the carriers contended that the FCC's internal process caused reputational damage before any court involvement. This case follows a trend of Supreme Court scrutiny on federal agency in-house enforcement powers, notably a 2024 decision that curbed the SEC's similar proceedings.