AT&T has come to an agreement with the Federal Trade Commission (FTC) to pay a $60 million settlement for a 2014 lawsuit filed by the latter. The government agency accused AT&T of misleading its customers by charging “unlimited” data plans without disclosing that their service would be throttled once they reached a certain data threshold during the billing period. At least 3.5 million customers were affected by AT&T’s throttling practice, which resulted to a decrease in data speed by up to 90 percent.
As part of its settlement agreement, AT&T customers who activated service under the unlimited plans offered by the carrier before 2011 will be entitled to a “partial refunds”. This is the year that AT&T started implementing its throttling policy.
AT&T is also required to disclose any sort of restrictions they will include in their plans. According to the agency, “The disclosures need to be prominent, not buried in fine print or hidden behind hyperlinks.”
In a press release announcing the settlement, FTC Bureau of Consumer Protection director, Andrew Smith, shared this statement: “AT&T promised unlimited data-- without qualification -- and failed to deliver on that promise. While it seems obvious, it bears repeating that Internet providers must tell people about any restrictions on the speed or amount of data promised.”
AT&T is respectful of the settlement and is glad to put the lawsuit behind it. A spokesperson for the company shared that “Even though it has been years since we applied this network management tool in the way described by the FTC, we believe this is in the best interests of consumers.”
The lawsuit took a few years to resolve. AT&T even challenged the jurisdiction of the agency for bringing the case. In 2016, a US appeals court dismissed the lawsuit after it found the FTC lacked authority because wireless broadband is a so-called Title II service, which typically fell under the FCC’s jurisdiction. In 2018, the FCC repealed Title II and it was ruled that the FTC had jurisdiction and authority to challenge AT&T’s way of marketing its mobile data services. After this, the case was continued.