FCC Unlikely to Hand Down Penalties Under Biden-Era Data Privacy Rules
The FCC appears unlikely to make any moves to enforce the data privacy rules approved under the Biden administration, which were recently upheld by the 6th U.S. Circuit Court of Appeals, industry experts said Friday. Last week, the panel that decided the case agreed to hold it in abeyance pending the FCC’s review of the 2023 order, as the agency requested. The panel ordered the FCC to file status reports every 60 days, with the first due Dec. 16.
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Also last week, groups representing ISPs asked the 6th Circuit to rehear the August decision en banc (see 2509290066). The ISPs argued that a Congressional Review Act (CRA) action in 2017 overturning similar requirements (see 2508140052) barred the 2023 order, which they also said went beyond the FCC’s authority under the Communications Act to impose the rules. Chairman Brendan Carr, then a commissioner, dissented when the agency approved the order.
There likely won’t be “any effort to enforce the rules in the short term,” predicted Andrew Schwartzman, senior counselor at the Benton Institute for Broadband & Society. “Given the intense effort to round up support for rehearing, I would have thought that there was a pretty good chance that the full court might hear it.” If the 6th Circuit decides the order is barred by the CRA, it wouldn’t have to address the merits of the Communications Act objections, he added.
Other industry officials agreed that the FCC likely won’t cite anyone for violating the rules, though they remain in effect. “I haven’t seen anything so far to suggest that Chairman Carr plans to start rolling out enforcement actions in this context,” emailed Kristian Stout, innovation policy director for the International Center for Law & Economics.
Public Knowledge Senior Vice President Harold Feld said Carr may want to “render the 6th Circuit's opinion moot” under the precedent set 75 years ago by the U.S. Supreme Court in U.S. v. Munsingwear. Under that decision, if there’s a “settlement or other resolution of a case while an appeal is pending, then the case … is vacated and rendered moot,” Feld said. There are exemptions, he said, noting that former FCC Chairman Ajit Pai unsuccessfully sought to have a 2016 case upholding net neutrality rules vacated because petitions for cert were pending.
If Carr is trying to get the rule vacated under Munsingwear, an NPRM on reversing the FCC's previous decision is likely, Feld said. “Meanwhile, the rule is still in effect, pending any new rulemaking and pending any appeal,” he added. “Given Carr's previous opposition to the rule and the likelihood the FCC will issue a new rulemaking, I wouldn't expect to see much enforcement.”
Free State Foundation President Randolph May said it appears unlikely that the 6th Circuit will review the case while it’s being held in abeyance. “While the FCC … may not take any enforcement action in any event, big picture, I wish the case would go forward in the 6th Circuit and then, if necessary up to the Supreme Court,” May said in an email. The panel’s decision “incorrectly interpreted” the CRA “so that its application would be narrower than Congress intended” and would give “agencies too much wiggle room to readopt regulations that Congress has already rejected.”
Joe Kane, the Information Technology and Innovation Foundation's director of broadband and spectrum policy, said “it certainly seems unlikely” that Carr “would pursue enforcement under the current rules before either the FCC completes its own review or the court rules on the petition for rehearing en banc.” If the agency kills the 2023 rules, “it's unlikely that the CRA question would get en banc review.”