Feeds

US court upholds penalty for phone records seller

200,000 reasons to never do it again

The Power of One Brief: Top reasons to choose HP BladeSystem

In a victory for privacy advocates, a federal appeals court has upheld a tough penalty meted out last year to a company that sold the contents of individuals' phone records without their permission.

A three-judge panel of the 10th US Circuit Court of Appeals affirmed a lower-court ruling that ordered the owners of Abika.com to surrender almost $200,000 in revenue earned from the sales of such records. From 2003 to 2006, the site offered to sell "details of incoming or outgoing calls from any phone number, prepaid calling card or Internet Phone" to anyone with a credit card.

The US Federal Trade Commission sued Abika parent company Accusearch in May 2006, just a few months before revelations that Hewlett-Packard obtained reporters' private phone records. The scandal exposed a practice known as pretexting, in which unscrupulous investigators misrepresent their identities to phone company representatives in an attempt to trick them into revealing the billing records of people.

In January 2008, a federal judge in Wyoming ordered Accusearch to pay $199,692 and to abandon the practice. The company appealed the decision on a variety of grounds, including the argument that under the US Communications Decency Act, or CDA, websites are immunized from lawsuits that stem from the acts of its users. Abika, the site argued, merely acted as a matchmaker that introduced private investigators to people seeking the phone records of others.

The appeals judges saw things differently. They branded Abika an "information content provider" because it actively developed databases containing the phone records.

"Accusearch solicited requests for such confidential information and then paid researchers to obtain it," the majority wrote in a decision (PDF) published Monday. "It knowingly sought to transform virtually unknown information into a publicly available commodity. And as the district court found and the record shows, Accusearch knew that its researchers were obtaining the information through fraud or other illegality."

The appeals court also rejected Accusearch arguments that the FTC lacked the authority to bring the case because the practice was not illegal at the time. They held that the Federal Trade Commission Act "enables the FTC to take action against unfair practices that have not yet been contemplated by more specific laws."

While the decision is good news to anyone who wants their phone bills to remain private, some legal experts worry its rejection of Abika's CDA claims could backfire. Provisions immunizing websites have largely been championed by free speech advocates who say the owners interactive services shouldn't be held responsible for the statements of individual users.

"I don't have any love for these guys," said Eric Goldman, a professor of law at Santa Clara University who blogged about the decision here. But in an interview with El Reg, he added: "Getting to that result without causing collateral damage can be tricky, and I'm not sure the court struck the right balance." ®

Designing a Defense for Mobile Applications

More from The Register

next story
Just TWO climate committee MPs contradict IPCC: The two with SCIENCE degrees
'Greenhouse effect is real, but as for the rest of it ...'
Adam Afriyie MP: Smart meters are NOT so smart
Mega-costly gas 'n' 'leccy totting-up tech not worth it - Tory MP
'Blow it up': Plods pop round for chat with Commonwealth Games tweeter
You'd better not be talking about the council's housing plans
Arrr: Freetard-bothering Digital Economy Act tied up, thrown in the hold
Ministry of Fun confirms: Yes, we're busy doing nothing
ONE EMAIL costs mining company $300 MEEELION
Environmental activist walks free after hoax sent share price over a cliff
Help yourself to anyone's photos FOR FREE, suggests UK.gov
Copyright law reforms will keep m'learned friends busy
Apple smacked with privacy sueball over Location Services
Class action launched on behalf of 100 million iPhone owners
UK government officially adopts Open Document Format
Microsoft insurgency fails, earns snarky remark from UK digital services head
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.