AT&T will pay $60 million after hiding data throttling


"For example, if an AT&T website advertises a data plan as unlimited, but AT&T may slow speeds after consumers reach a certain data cap, AT&T must prominently and clearly disclose those restrictions", the commission said. In July 2014, Verizon faced criticism from the FCC over plans to throttle the connections of unlimited data plan customers.

As part of the settlement, AT&T is prohibited from making representations about the speed or amount of mobile data, including that it is unlimited, without disclosing other restrictions. According to the complaint, data speeds were slowed up to 95%, making many applications like Global Positioning System navigation, web browsing and video streaming "practically inoperable".

"If they reach a certain amount of data use in a given billing cycle, AT&T reduces-or "throttles"-their data speeds to the point that many common mobile phone applications - like web browsing, Global Positioning System navigation and watching streaming video-become hard or almost impossible to use", the FTC quaintly alleged".

"When any business, big or small, offers an unlimited service for a fixed fee, that business is taking a risk", said Chopra.

Following a protracted legal battle, AT&T eventually agreed to settle the lawsuit by paying a $60 million fine, which was approved by four out of the five FTC commissioners; Rebecca Kelly Slaughter recused herself. "Yet when dominant companies don't deliver on their end of the bargain, too often they can turn a profit, as their customers feel powerless to do anything about it".

AT&T challenged whether the FTC had jurisdiction to bring the case, but an appeals court ruled in 2018 the regulator had the authority to challenge the company's marketing practices.

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AT&T did not admit or deny any wrongdoing in the court documents, but it did issue a statement thanking the commission, while acknowledging that it stopped behaving badly "years" ago.

"The refund process will be automatic and no applications will be accepted", said the FTC.

"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", an AT&T spokesperson said in response to the settlement.

Unfortunately those customers will remain fleeced, as there are some 3.5 million of them and only $60 million to distribute. The company abandoned the plan in October 2014.

Customers won't be required to file for a claim. Those who have moved on will be receiving a check. It works out to about $17.14 or less for each affected consumer.