AT&T to Pay $60 Million to Resolve FTC Allegations It Misled Consumers with ‘Unlimited Data’ Promises

AT&T Mobility, LLC, will pay $60 million to settle litigation with the Federal Trade Commission over allegations that the wireless provider misled millions of its smartphone customers by charging them for “unlimited” data plans while reducing their data speeds. In a complaint filed in 2014, the FTC alleged that AT&T failed to adequately disclose to its unlimited data plan customers that, if they reach a certain amount of data use in a given billing cycle, AT&T would reduce—or “throttle”—their data speeds to the point that many common mobile phone applications, such as web browsing and video streaming, became difficult or nearly impossible to use. “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. “While it seems obvious, it bears repeating that Internet providers must tell people about any restrictions on the speed or amount of data promised.” The FTC alleged that, despite AT&T’s unequivocal promises of unlimited data, it began throttling data speeds in 2011 for its unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period. AT&T’s alleged practices affected more than 3.5 million customers as of Oct 2014, according to the FTC complaint. After AT&T challenged whether the FTC had jurisdiction to bring the case, the Ninth Circuit U.S. Court of Appeals in 2018 ruled that the FTC did have jurisdiction and authority to challenge the company’s marketing of mobile data services, allowing the Commission’s case to proceed.