The Ninth Circuit Court of Appeals on Tuesday handed the Federal Trade Commission (FTC) a win with its decision to revisit the Commission’s case against U.S. wireless carrier AT&T for allegedly throttling customer data.
The decision was hailed by Federal Communications Chairman Ajit Pai as a “big win for American consumers.”
The FTC originally brought suit against AT&T in 2014, accusing the carrier of failing to adequately disclose its data throttling practices to consumers. The Commission argued AT&T’s practice was prohibited under section 5 of the FTC Act. But AT&T countered that it was exempt from liability under that provision due to its status as a “common carrier.” That status, AT&T said, covered even non-common carrier activity, making it immune to enforcement actions by the FTC.
AT&T made a motion to dismiss the FTC’s lawsuit – which was denied by a district court before being granted by a three-judge panel of the Ninth Circuit Court in August. The FTC appealed the dismissal to the full Ninth Circuit Court, arguing the decision would create an “enforcement gap” and leave millions of consumers defenseless against “unfair or deceptive practices.”
The Ninth Circuit Court of Appeals indicated Tuesday it will revisit the issue en banc. Chief Judge Thomas said the previous decision from the three-judge panel “shall not be cited as precedent by or to any court of the Ninth Circuit” in the meantime.
After the three-judge panel ruling dropping the case, the FTC and other critics pointed out that such a decision in support of AT&T’s argument would create a blind spot where neither the FTC nor the FCC has enforcement powers. The FTC said Google is among the companies that could benefit from this gap due to its Google Fiber business.
“The FCC’s authority over common carriers is limited to the provision of services for or in connection with common carriage,” former FTC Chairwoman Edith Ramirez said in September. “If common carriers are providing non-common carrier products or services, one outcome might be that neither the FCC nor the FTC would have jurisdiction to respond to practices that harm consumers. And even in cases where the FCC can respond, it lacks authority to seek consumer redress.”
In his statement Pai on Tuesday said the court’s decision not only makes it “easier for the FTC to protect consumers’ online privacy,” but also backs up the FCC’s case to reverse the 2015 Title II Order.
“The court’s action also strengthens the case for the FCC to reverse its 2015 Title II Order and restore the FTC’s jurisdiction over broadband providers’ privacy and data security practices,” Pai said. “Indeed, it moves us one step closer to having the consistent and comprehensive framework for digital privacy that the American people deserve.”
Filed Under: Industry regulations + certifications