FTC fines AT&T $60 million for throttling unlimited data plans

Ruben Fields
November 6, 2019

In the dispute, the FTC accused AT&T of reducing - or "throttling" - its customers' data speeds to the point that many common mobile phone applications, such as web browsing and video streaming, became hard or almost impossible to use. The carrier stopped offering unlimited data in 2010 and sold tiered plans instead, which capped data and charged huge penalties for overages. In July 2014, Verizon faced criticism from the FCC over plans to throttle the connections of unlimited data plan customers.

"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. 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". It will also force AT&T to clearly disclose the limits it imposes on unlimited data plans.

In its announcement on Tuesday, the FTC says AT&T would start to throttle its unlimited data plan customers after they used as little as 2 GB of data in a billing cycle (with half of that amount being reachable just by watching one hour of Netflix in standard definition). "Subscribers were lured in with promises of unlimited data service for a fixed fee, trapped into multiple years of service by punitive termination fees, and then forced to switch to a more expensive tiered plan with overage fees to actually receive the unlimited data they were promised". "If customers use much more of the service than projected, the company will take a hit". This is how business works.

The Federal Communications Commission fined AT&T $100 million in 2015 over similar allegations.

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An AT&T spokesman told DailyMail.com on Tuesday: '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'. AT&T was able to avoid the suit at first by successfully arguing that the FTC did not have jurisdiction over it.

Despite the settlement, Chopra said the FTC needs to continue to scrutinize the practices of AT&T and other major firms, saying "scammers come in all sizes".

The company has also unveiled three new "unlimited" data packages that offer up to 100GB of unthrottled data.

The $60 million will be put toward partial refunds for affected customers. Customers won't have to submit a claim to receive the money. Current eligible AT&T customers will see it as a credit on their billing statements.

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