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 begins in the year 2011. For context, this is just four years after the launch of the iPhone and mobile revolution. The FTC says 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,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection, 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 even agrees with 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,” the company said in a statement.
That’s a different stance than originally, when AT&T challenged whether the FTC had jurisdiction to bring the case and the Ninth Circuit U.S. Court of Appeals in 2018 ruled in the FTC’s favor.
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 agency added. “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 says the proceeds from settlement will go out to customers in the form of partial refunds for those who had signed up for unlimited plans prior to 2011 but were throttled.
AT&T is now clearer about how it sells “unlimited” data, with big bold letters on its website: “AT&T may slow data speeds when the network is busy.”
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