AT&T Proclaims It Cannot Be Sued For Selling Your Location Data To Random Nitwits

Legal Issues

from the ill-communication dept

You’ll of course recall that wireless carriers are in the midst of a massive, ongoing scandal involving your location data. As in, they’ve been repeatedly caught collecting and selling your daily movement habits to a rotating crop of random nitwits, including stalkers and folks pretending to be law enforcement. And while they say they’ve stopped the practice there’s no way to be sure, given that the current industry-friendly FCC has yet to pressure (or even mildly scold) them, much less conduct any real investigation into whether mobile carriers have actually stopped, or what they’ve done with location data collected over the last decade.

With regulatory capture ensuring that government is feckless in the face of the scandal, the EFF sued AT&T back in July on behalf of several California AT&T users who say they were never informed, nor gave consent, for their location data to be used and sold in this fashion. The lawsuit alleges that AT&T violated the Federal Communications Act by not protecting location data, and California’s Unfair Competition Law and the Consumers Legal Remedies Act by misleading consumers as to the sale of this data. The group also pushed to have AT&T delete the trove of valuable location data it has already collected.

AT&T being AT&T, the company has responded by proclaiming that it cannot be sued because its customers have agreed to mandatory binding arbitration in their user contracts:

“AT&T is arguing that its customers can?t sue the company for selling location data to bounty hunters, according to recently filed court records. AT&T says the customers signed contracts that force them into arbitration, meaning consumers have to settle complaints privately with the company rather than in court.”

For years, mobile carriers used contract fine print to prohibit its customers from suing them. Instead, users were forced to participate in binding arbitration, a system whereby company-employed arbitrators weigh the evidence — and unsurprisingly rule in favor of the company employing them a dramatic majority of the time. Initially, lower courts repeatedly derided this behavior as an “unconscionable” curtailing of consumer rights and abuse of the law. But in 2011 the Supreme Court’s AT&T Mobility v. Concepcion ruling declared that what AT&T was doing was perfectly okay, resulting in countless companies now following AT&T’s lead.

AT&T’s problem is this new case is pending in the US District Court for the Northern District of California. Last year this same court declared that AT&T couldn’t use these binding arbitration agreements to avoid class action lawsuits over accusations AT&T had repeatedly lied to users about their “unlimited” data plans being throttled. Why? Because the California Supreme Court ruled in McGill v. Citibank that “an arbitration agreement that waives the right to seek the statutory remedy of public injunctive relief in any forum is contrary to California public policy and therefore unenforceable.”

Enter AT&T, which is effectively arguing that because the EFF is only representing a handful of pissed off customers and not the public as a whole, that ruling doesn’t apply:

” In the new case, AT&T argues that the McGill decision does not apply “because the injunctive relief Plaintiffs seek is directed at a subgroup of AT&T customers, not the general public as a whole.”

Granted AT&T’s tap dancing to avoid anything even vaguely resembling accountability is a thing to behold. Like other ISPs it had argued that states can’t hold it accountable for wrong doing because it would violate the company’s First Amendment rights. It has also tried to tap dance in and out of the lines of FTC and FCC authority making conflicting arguments on agency authority when convenient. Here, AT&T had previously denied that selling phone location data was illegal, despite the fact that Section 222 of the Communications Act clearly says it is “without the express prior authorization of the customer.”

But other court rulings on other subjects (like this one on roaming fees in the Ninth Circuit U.S. Court of Appeals) have been poking holes in AT&T’s arbitration arguments, suggesting it’s not quite the bullet proof “get out of jail free card” AT&T’s lawyers seem to think it is.

Filed Under: arbitration, data, privacy
Companies: at&t