In a decision that could significantly impact the scope of the Federal Trade Commission’s consumer protection authority under Section 5 of the FTC Act, the U.S. Court of Appeals for the Ninth Circuit ruled on August 29, 2016, that common carriers are entirely exempt from the FTC’s jurisdiction, even when engaged in “non-common carrier” activities. The court’s decision in FTC v. AT&T Mobility LLCreflects a major rebuke of the FTC’s prior interpretation of its authority under Section 5, under which the agency regulated the non-common carrier activities and services of companies otherwise classified as common carriers. Specifically, the decision curtails the authority of the FTC – currently the leading federal privacy and data security enforcement agency – over any entity that offers common carrier services. At the same time, the decision will likely be cited by the Federal Communications Commission (FCC) to justify its attempts to impose broad new privacy and data security regulations on Internet service providers (ISPs), following that agency’s 2015 Open Internet Order, which reclassified broadband Internet access service as a common carrier service.
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