The FTC is suing AT&T for promising unlimited data, only to later slow speeds to a crawl
Concerned with deceptive and unfair data throttling, the Federal Trade Commission — who works for consumers to prevent fraudulent business practices — is suing AT&T for deceptive and unfair data throttling related to the company’s once advertised “unlimited data” data plans.
According to the FTC, AT&T knowingly misled consumers by charging consumers for unlimited data, but later reducing these speeds by as much as 90% as a result. It’s really not too uncommon and we’ve seen T-Mobile and other carriers use a similar business tactic in regard to their “unlimited” data plans. The difference? Those are all tied to a guaranteed number of gigabytes consumers can expect to receive high-speed data.
AT&T is a different case in that the FTC feels they never fully disclosed to those on unlimited data plans that they would be throttled into oblivion, reducing their service after as little as 2GB of usage. For some customers, it pushed them to the brink, eventually causing them to forfeit their lines of service and eating hefty early termination charges. Anyone who’s tried to use their Android device while on Edge (2G) knows how pull-your-hair-out frustrating this can be whether it’s loading a web page, streaming music or video, or just trying to load up GPS/navigation — it’s damn near impossible.
For customers grandfathered into unlimited data (after AT&T made the move to tiered data), the FTC says AT&T didn’t do a good enough job at notifying these customers that service would be handicapped so severely, a process which saw upwards of 3.5 million AT&T customers being throttled more than 25 million times.
In an official statement, FTC Chairwoman Edith Ramirez made her position clear: you can’t promise unlimited data then later put a limit on speeds.
“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise. The issue here is simple: ‘unlimited’ means unlimited.”
While it’s totally fine for AT&T to introduce new “unlimited” data plans and change their terms and definitions today — they aren’t allowed to redefine their terms for those still under contract, especially without adequately notifying them first. This, the FTC alleges, is in direct violation of the FTC Act. Of course, the whole matter will be settled in court (U.S. District Court for the Northern District of California, San Francisco Division), so where it goes from here remains to be seen.
[FTC]