AT&T Hit With $2M Fine For Spying On Rivals

Dallas-based telecom behemoth AT&T will shell out over $2 million to settle federal charges of illegally accessing confidential customer data belonging to a rival it was legally obligated to divest. The scheme, uncovered by federal prosecutors, involved AT&T personnel snooping on customer accounts and actively poaching customers from the businesses they were supposed to be separating.

The roots of this mess trace back to 2008, when AT&T acquired Dobson Communications Corporation. To appease antitrust concerns, the feds forced AT&T to spin off mobile wireless operations in three rural areas – two in Kentucky and one in Oklahoma. A management trustee was appointed to oversee the separation, but prosecutors allege AT&T never truly let go. Instead, they actively undermined the divestiture by keeping access to sensitive customer information.

According to a petition filed in U.S. District Court, AT&T failed to properly segregate the customer data of the divested businesses, allowing its own employees to access it. This wasn’t just a technical oversight; the feds claim AT&T personnel used this information to directly solicit customers away from the businesses they were supposed to be letting operate independently. Worse still, AT&T allegedly waived early termination fees for customers to sweeten the deal, effectively stealing business.

Deborah A. Garza, Acting Assistant Attorney General leading the Antitrust Division, made it clear: “It is imperative that companies fully abide by their court-ordered obligations…When companies fail to comply with a court order, the Antitrust Division will take swift and certain action.” This isn’t just about money; it’s about holding corporate giants accountable for playing by the rules, even when those rules cut into their profits.

The Federal Communications Commission (FCC) had adopted certain provisions of the original court order approving the AT&T-Dobson merger, meaning both agencies were working in tandem on the investigation. The $2 million settlement includes reimbursement for the cost of the probe. While AT&T admits no wrongdoing as part of the agreement, the fine sends a clear message to other corporations: circumventing antitrust laws will come with a hefty price tag.

With approximately 73 million customers nationwide, AT&T remains the largest provider of mobile wireless services in the U.S. This settlement, while significant, is likely a small cost of doing business for a company of that size. But for the businesses AT&T targeted, and for the principle of fair competition, the feds’ action offers a small measure of redress. The court still needs to approve the settlement agreement before it’s finalized.

RELATED: AT&T Fined Over $2M for Breaking Court Orders in Dobson Merger Case

RELATED: AT&T Hit with $2M Fine Over Court Order Violations