United States: FCC Privacy Regulations: The Next Litigation Trend?

Article by Sam Castic, Aravind Swaminathan and Antony P. Kim

Last month the Federal Communications Commission ("FCC") closed the comment period for its proposed privacy regulations, which we previously wrote about here. The million dollar question on everyone's minds is whether the final regulations will be broader or narrower in scope than the initial proposal, which included not only a significant expansion of the definition of personal information, but also sweeping new obligations and raised serious questions in areas where the obligations could become even stricter still.[1] Accordingly, companies subject to the new regulations are bracing for tighter FCC Enforcement Bureau scrutiny of broad data collection and handling practices.

Fertile Ground for Class Actions.

FCC scrutiny, however, may be just the tip of the iceberg. Organizations should consider the significant possibility of consumer and class action litigation in evaluating the risk landscape.

The Communications Act has a rarely used provision that sets forth a private rights of action for violations of the Act itself or related regulations. Specifically, Section 206 of the Communications Act provides that common carriers—including broadband providers subject to the FCC's privacy regulations—may be liable to any person injured for the "full amount of damages sustained" from "any act, matter, or thing in this chapter prohibited or declared to be unlawful." Carriers are similarly liable for omissions to do any act, matter, or thing required to be done under the chapter. Importantly, these provisions include an ability to recoup attorney fees. A provision of Section 207 allows individuals to "bring suit for the recovery of the damages for which [the] common carrier may be liable" in any federal district court for violations of the chapter. "Chapter" is defined broadly and includes the primary provisions of the Communications Act that the FCC has proposed relying upon for the privacy regulations.

Such actions would not be without basis in precedent. The Supreme Court previously held that Section 207 authorized a private right of action to enforce regulations that the FCC issued pursuant to the Communications Act. In that context—a dispute between two companies—the Court held that the FCC regulations appropriately declared certain practices to be "unreasonable" (i.e., "unlawful" under the Communications Act) under Section 201 of the Act.[2] The Court reasoned that since the practices were "unlawful", the plaintiff could claim damages under Section 206, and maintain a suit for those damages under Section 207. The FCC's proposal to base its privacy regulations, in part, on Section 201—the same statutory basis for which the Supreme Court upheld a private right of action—would permit plaintiffs' class actions. Even if the statutory basis for the privacy regulations is not Section 201, there is still a strong argument that the Act would allow a private right of action to sue for damages allegedly suffered for violations of the regulations, as the regulations are issued pursuant to the Act, and Section 206 allows plaintiffs to seek damages for acts that are either prohibited or unlawful under the Act (and potentially, by the FCC regulations interpreting the Act).

It remains unclear the precise types of privacy rule violations the courts might be asked to decide. With the potential that the FCC's rules will broaden privacy obligations, among the possibilities are actions based on sharing of personal (potentially a broader construct) information for marketing purposes without the necessary consent; failure to comply with the consent recordkeeping requirements or to obtain consent just before the use or disclosure; or failure to notify individuals affected by a data breach within ten days.

There is some good news. Following the Supreme Court's recent decision in Spokeo, Inc. v. Robins, plaintiffs will not be able to simply allege a violation of a statutorily conferred right, such as those under Section 201. Instead, they may also have to allege an injury suffered. Given how broadly personal information may be defined under the new rules, alleging harm may not be an easy task.

What Should You Do?

Broadband providers should begin assessing the proposed privacy regulations against their existing business practices. This will give them a head start in dealing with the final regulations once they are issued. Thereafter an enterprise-wide assessment and modification to risky business practices can further reduce the chance of becoming targets for enforcement actions or litigation.

Companies that do business with broadband providers like cable companies and wireless carriers should consider careful review of their contractual obligations with those providers. At a minimum, they should understand which of these novel theories may implicate indemnification or duty to defend obligations by virtue of their practices with data—identifiable or not—that they are asked to deal with for broadband providers. Ambiguous contracts where each party promises to comply with applicable laws, but no party specifies what the laws are or how they will do so, could lead to new disputes to allocate liability between providers and companies that work with them. Finally, companies that work with broadband providers may want to understand the scope of the final regulations to understand what traps to look for in their agreements with providers.

Without a doubt, the new privacy regulations will provide a broader array of conduct for the FCC Enforcement Bureau to investigate and potentially penalize companies when it identifies improper privacy and data protection practices. But, the ground also appears to be fertile for potential plaintiffs to get involved. Accordingly, companies should begin to consider this landscape when making business calculations about resource allocation for compliance oriented activities, especially because the financial stakes are likely to be even higher with the plaintiffs' bar potentially testing the limits of the Communications Act's private right of action in alleging damages for violations of the FCC's privacy regulations.


[1] The proposed regulations do not just broaden the kinds of data that would be defined as personal information. They also propose new data protection, sharing and use requirements (even if the data is aggregated) that companies must document and train employees and vendors on. They further require that mistakes be reported to the FCC, and data breaches be reported to government officials and individuals within 7 and 10 days respectively. Unlike the various state laws, the proposed rule would require notification regardless of whether there is a risk of harm to individuals, and there is no safe harbor for inadvertent access by unauthorized employees. Ultimately, the rules will likely disrupt existing business practices, and create an environment where FCC regulated entities will need to disclose even more data breach incidents.

[2] Global Crossing Telecomm., Inc. v. Metrophones Telecomm. Inc., 550 U.S. 45 (2007).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
20 Sep 2018, Seminar, Tokyo, Japan

Orrick's Total Access Japan Event Series provides entrepreneurs business, tactical, and legal education through complimentary panels and seminars and networking events. The next event will take place on Thursday, September 20 from 6:00 pm to 7:30 pm.

21 Sep 2018, Conference, Florida, United States

Employment partner, Michael Weil will be participating in The Intellectual Property Law Institute’s 2018 Conference.

26 Sep 2018, Conference, New York, United States

Employment Partner, Mandy Perry and Chair of Orrick's Global Employment Law Practice, Mike Delikat will be participating in the Global Business Protections 2018: International Restrictive Covenants and Confidential Information Conference.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions