How can – and why is – the FCC pursuing overseas companies so aggressively, as it has with its recent, record-breaking fine of a Chinese company selling jammers? Mitchell Lazarus at the ComLawBlog writes about how the FCC is now going after the source of products like jammers overseas.
The FCC has long gone after companies that import illegal electronic products, like jammers. Now it is going after a source overseas.
A document lengthily titled “Notice of Apparent Liability for Forfeiture and Order Illegal Marketing of Signal Jamming Devices” proposes to assess a fine of $34.9 million, which adds up to a couple of billion yuan (元2,180,220,006.23, to be precise) against the Chinese company C.T.S. Technology Co., Limited for marketing jammers in the United States. The FCC knows the company did this because FCC personnel successfully ordered ten such devices, giving U.S. billing addresses and taking delivery in the United States. The ten devices they ordered were only a drop in the bucket: C.T.S. advertised a total of 285 different jammers. Adding insult to injury, C.T.S. promoted some products as having been approved by the FCC, where in fact the FCC does not authorize any jammers for commercial sales.
The $34.9 million number represents the maximum penalty for a multi-day marketing violation, which is $122,500, multiplied by the 285 models offered for sale.
Impressive, but possibly only symbolic, because collection may be difficult. If the target of a fine chooses not to pay – a result we suspect to be more than likely here – the FCC can ordinarily try to collect by suing the offender in federal district court. But the court’s jurisdiction may not reach into China. There is a treaty called the Hague Service Convention that may help, but we’re guessing its implementation might be slow and uncertain.
We also can’t help questioning the extent to which C.T.S. actually violated the law.
True, it shipped ten devices to U.S. addresses, but it performed its acts in China, where it may be perfectly legal to ship jammers to U.S. addresses. One unquestionably unlawful step in the transaction was the importation of the ten devices – but FCC staffers, not C.T.S., did that by initiating the transactions and accepting delivery.
Penalizing C.T.S. for the 275 models that it advertised but did not ship to the U.S. is even more tenuous. There is only one Internet; a company cannot easily promote its products on line in some parts of the world but not others. The FCC’s best arguments are probably that (a) some of the advertised products jam wireless frequencies used only in the United States and (b) the company quotes prices in U.S. dollars. True, C.T.S. could refuse to fill U.S. orders and could display a notice on its website stating that policy. But the failure to have the policy and to display the notice may not add up to an actionable violation.
To be clear: C.T.S.’s jammers are disruptive and potentially dangerous. We agree with the FCC that they have no place in the United States. We fully support the FCC’s efforts to keep them out of the country. We just wish the FCC could manage it from a more secure legal platform.
The FCC’s Record Breaking Fine – Click Here