Technology Law News: Common Carrier Loophole Could Benefit Online Business Behemoths

technology law common carrier loopholeThe FTC may score a win, courtesy of the Ninth Circuit. The bench opted to revisit the FTC’s case against AT&T for allegedly throttling customer data. Technology law circles are buzzing about this case because if the judges rule in favor of AT&T, the decision will create an  “oversight loophole.”

FTC v. AT&T: The Telecom Fight Over Governmental Oversight

This case began in 2014 when the FTC sued AT&T, under Section 5 of the FTC Act, over improper disclosures about data throttling practices.  AT&T’s response?  You aren’t the boss of us.

Argument: The FTC Shouldn’t Exercise Oversight of Common Carriers

AT&T argued it was exempt from liability because a portion of the business fell under the status of common carrier. As a result, company lawyers reasoned, the entire organization should be exempt from FTC oversight when it comes to disclosure issues.

The senior vice president of Public Knowledge, Harold Feld said, “[The decision] was huge because it was totally unexpected.  Nobody’s ever ruled that way before.”

Why FTC v. AT&T Is A Big Deal Internet Technology Law Case

Since 1914, the FTC has been “working to protect consumers by preventing anticompetitive, deceptive, and unfair business practices, enhancing informed consumer choice and public understanding of the competitive process, and accomplishing this without unduly burdening legitimate business activity.”

For years, the FTC’s gaze has lingered on Internet-related issues.  But if this case falls in favor of AT&T, the commission could, effectively, lose some proverbial power.  How will larger online companies avoid FTC oversight? They’ll buy a small cellphone company, and voila — regulatory-avoidance mission accomplished.

What The Future Holds If AT&T Wins This Internet Law Case

For the time being, the “common carrier loophole” is plugged while the Ninth Circuit, once again, ponders the case. However, if the court rules in favor of the telecom, it will uncork.

Interestingly, on May 18th, the FTC voted 2-1 to begin eliminating net neutrality rules. The change altered the classification of ISPs as common carriers under the Communications Act.  If officials nix the common carrier classification, AT&T will have to change their defense strategy in its case against the FTC.

Kelly / Warner is a leading Internet law firm that works with tech corporations and Internet Service Providers across the United States, Canada, United Kingdom, Asia, and Europe.

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