Consumers weren’t happy when they signed up with AT&T for an unlimited wireless plan, only to see their data speeds reduced as they consumed data.
To appease the consumers and the Federal Trade Commission, which sued the wireless giant, AT&T will pay $60 million to settle the litigation.
The complaint dates back to 2014, but the issue began in 2011. For context, that’s four years after the launch of the iPhone and mobile revolution. The FTC said AT&T didn’t notify consumers that if they reached a certain amount of data use in a given billing cycle, AT&T would throttle their speeds, making usage very sketchy.
“AT&T promised unlimited data – without qualification – and failed to deliver on that promise,” Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said in a statement announcing the settlement. “While it seems obvious, it bears repeating that Internet providers must tell people about any restrictions on the speed or amount of data promised.”
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AT&T said it had been some time since it applied the network management tool in the way described by the FTC and “we believe this is in the best interests of consumers.
That’s a different stance from when AT&T challenged whether the FTC had jurisdiction to bring the case. The 9th Circuit U.S. Court of Appeals ruled in the FTC’s favor in 2018.
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.
“The disclosures need to be prominent, not buried in fine print or hidden behind hyperlinks,” the agency said. “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 the proceeds from settlement will go to customers in the form of partial refunds for those who signed up for unlimited plans before 2011 but were throttled.
AT&T is clearer about how it sells “unlimited” data. Big bold letters on its website proclaim, “AT&T may slow data speeds when the network is busy.”
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