AT&T has agreed to pay USD 60 million to the Federal Trade Commission to settle allegations the mobile operator misled customers over its practice of throttling speeds on unlimited data plans. This settles a case filed five years ago by the FTC against the company and will see the settlement paid out to the affected customers.
The FTC found that AT&T failed to adequately disclose that, if customers reach a certain amount of data used in a given billing cycle, AT&T would reduce their data speeds to the point that many common mobile applications, such as web browsing and video streaming, became difficult or nearly impossible to use.
The practice was thought to date back to 2011, with customers throttled from as little as 2 GB per month. The practices affected more than 3.5 million customers as of October 2014, according to the FTC complaint.
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.
As part of the settlement, AT&T is prohibited from making any representation about the speed or amount of its mobile data, including that it is 'unlimited', without disclosing any material restrictions on the speed or amount of data. The disclosures need to be prominent, not buried in fine print or hidden behind hyperlinks.
The USD 60 million will be redistributed among the affected customers as refunds.
