AT&T Fined $60 Million for Slowing Down Unlimited Data Plans

Yolanda Curtis
November 8, 2019

"AT&T promised unlimited data - without qualification - and failed to deliver on that promise", said Andrew Smith, Director of the FTC's Bureau of Consumer Protection.

"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 FTC said.

FTC Chairman Rohit Chopra said on Tuesday: 'AT&T's bait-and-switch scam is a good window into the many harms that result from dominant companies operating without the discipline of meaningful competition. "While it seems obvious, it bears repeating that Internet providers must tell people about any restrictions on the speed or amount of data promised", he said in a statement.

In statements and interviews about the litigation, AT&T officials said it notified customers in text messages and emails when they hit data limits to warn them about slower speeds. Conversely, if customers use less than projected, the company will haul in even larger profits. He also pointed out that AT&T, which had exclusivity on the Apple iPhone in the USA from 2007-2010, started offering an unlimited data plan for $30 per month in 2008 when the iPhone 3G was launched. This is how business works.

The $60 million will be deposited into a fund to provide partial refunds to both current and former customers who had signed up for unlimited plans prior to 2011 but had their data speeds reduced, or "throttled" by AT&T when their usage went past a certain threshold. The FTC says that customers do not need to take action.

AT&T had challenged the FTC's jurisdiction in this case and its authority over the marketing of wireless data services.

In a lawsuit, the commission charged that carrier had failed to publicly disclose the data-throttling practices, which ensnared at least 3.5 million customers. "Affected consumers will not be required to submit a claim for the refunds".

The Federal Communications Commission fined AT&T $100 million in 2015 over similar allegations. Affected customers will automatically receive credit on their bills or will get a check, if they are no longer an AT&T customer, according to the FTC's news release. In 2012, as the company boasted to investors that customers were fleeing its unlimited plan for tiered plans, it spent more on share buybacks than it invested in its wireless network.

Other reports by iNewsToday