US telecoms giant AT&T has been fined $60 million by the Federal Trade Commission for throttling data plans which were advertised as ‘unlimited’.
Yesterday the US Federal Trade Commission finalized a settlement with AT&T relating to claims of unfair throttling on unlimited data plans in 2011. According to reports by The Verge, the lawsuit against AT&T has been ongoing since 2014.
What exactly did AT&T do?
The FTC first launched the lawsuit in response to widespread complaints from AT&T unlimited data plan customers who claimed their data was being slowed after reaching a certain threshold.
Specifically, the FTC’s case against AT&T revolves around the fact that the data throttling on the so-called ‘unlimited’ data plans was not advertised to its consumers.
The provider stopped offering its unlimited plans back in 2010, but a number of customers were still paying for and using the unlimited data plans they had previously signed up to. It is these customers specifically who had their data throttled as outlined in the law suit.
“AT&T promised unlimited data – without qualification – and failed to deliver on that promise,” said the director of the FTC’s Bureau of Consumer Protection, Andrew Smith.
According to the FTC’s case, AT&T restricted the data upload/download speed for unlimited plan customers once they went over a certain data limit each month.
When the allegations were first brought to court in 2014, 3.5 million unique customers had been affected by the practice, with data speeds being slowed more than 25 million times since AT&T stopped offering the unlimited data plans.
How will the case affect AT&T going forward?
As a result of a ruling against the telecoms giant, it will have to implement some significant changes to how it advertises its data plans.
From now on it will have to disclose any restrictions that will be imposed upon customers, regardless of whether data plans are advertised as ‘unlimited’ or not.
In a statement about the ruling, the FTC said that AT&T will have to be clear about any restrictions to data plans going forward.
“The disclosures need to be prominent, not buried in fine print or hidden behind hyperlinks. 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 $60 million fine handed out to AT&T doesn’t amount to much for a company which reported an annual revenue of $170 billion in 2018.
But the money from the fine will be used to provide partial refunds to AT&T customers. Specifically, customers who were affected by data throttling whilst paying for unlimited data plans before 2011 will be eligible to receive the compensation.
Can US cellular customers expect more honest advertising from now on?
According to reports by USA Today, AT&T may already have taken action to update its advertising in the aftermath of the ruling.
On the front page of AT&T’s website, the ad for the AT&T unlimited wireless plan now includes the disclaimer, “AT&T may slow data speeds when the network is busy.”
While data will likely still be throttled under heavy loads, at least customers will now be aware it is happening.