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T-Mobile, the third-largest telecom operator in the US, is in troubled waters again. The Committee on Foreign Investment in the US (CFIUS) has imposed a massive fine of $60 million on T-Mobile. The committee has fined the smartphone carrier for failing to prevent unauthorized access to sensitive user data.
CFIUS’ $60 million fine on T-Mobile is the largest it ever issued on any company
The power committee that scrutinizes foreign investment for national security risks has fined T-Mobile $60 million. It is the committee’s largest penalty ever. The fine on T-Mobile is imposed for failing to prevent unauthorized access to sensitive user data. In addition, the committee has levied this fine for failing to report the data breaches.
The US officials said that the latest fines are related to the unauthorized data access that occurred in 2020 and 2021. T-Mobile’s newest case is related to the telco’s acquisition of Sprint in 2020. At the time, CFIUS imposed conditions on the purchase, which included ensuring the sensitive data was properly secured. Notably, CFIUS has jurisdiction over T-Mobile because the German company Deutsche Telekom holds the majority of its shares.
Reuters reports that CFIUS has found that T-Mobile breached the conditions of the acquisition of Sprint. It is alleged that the telco failed to adequately protect sensitive user data. And then, it also failed to report unauthorized access to data to the regulators.
“The $60 million penalty announcement highlights the committee’s commitment to ramping up CFIUS enforcement by holding companies accountable when they fail to comply with their obligations,” one of the U.S. officials said. CFIUS doesn’t usually name companies at the center of its violation disputes. Thus, outing T-Mobile to the public in the latest case may put other companies on notice to fulfill their contractual obligations.
T-Mobile said that it experienced technical issues during its integration with Sprint
According to Reuters, T-Mobile said it experienced technical problems during its post-acquisition integration with Sprint. It affected “information shared from a small number of law enforcement information requests.” Besides, the telco claims that the data never left the law enforcement community. Also, it was reported “in a timely manner” and was “quickly addressed.”
Notably, CFIUS has issued as many as six penalties in the last 18 months on various companies. It is triple the number of fines the committee imposed between 1975 and 2022. The penalties ranged from $100,000 to $60 million.