The Supreme Court ruled 8-1 Tuesday that the Federal Communications Commission has the authority to penalize AT&T and Verizon for mishandling customer location data, rejecting the carriers’ constitutional challenges.

AT&T and Verizon faced combined fines totaling $104 million in 2024 following allegations they failed to properly secure real-time location information belonging to their customers. The two telecommunications giants argued the FCC’s enforcement process violated their Seventh Amendment right to a jury trial in civil cases involving substantial financial penalties.

What the Court Decided

Chief Justice John Roberts wrote in the majority opinion that companies retain access to jury trials through an alternative pathway. “Companies retained access to jury trials through an alternative path,” Roberts wrote, noting that FCC penalty orders do not become legally binding until enforced in federal court.

The carriers had contended that the FCC framework allowed them to pay fines and subsequently challenge the penalties in federal appeals courts, rather than having cases decided by a jury from the start. The court rejected this argument, finding no constitutional violation in the agency’s administrative enforcement structure.

The Privacy Breach Background

The dispute stems from privacy breaches discovered in 2018, when unauthorized parties including bounty hunters accessed the carriers’ location data without customer authorization. The incident prompted the FCC to pursue enforcement action against both companies for inadequate security measures.

Implications for Regulatory Power

The decision preserves the FCC’s enforcement powers over telecommunications companies regarding consumer protection violations. The ruling also clarifies that administrative penalties imposed by federal agencies do not automatically trigger jury trial requirements under the Constitution.

The Supreme Court’s decision affirmed the FCC’s ability to protect consumers through its penalty framework without requiring jury trials at the initial enforcement stage. Both carriers can still pursue judicial review after paying penalties, the court found.