On Tuesday, the Federal Trade Commission announced that AT&T will pay $60 million to settle a case with the agency. It alleges that the company lied to customers about its “unlimited” data plans because it throttled their data if they ever went over a certain threshold.
The settlement requires AT&T to deposit that $60 million into a fund that will be used to provide “partial refunds” to customers who signed up for unlimited data plans before the year 2011 (when the company’s throttling policy first went into effect). The company is also barred from marketing plans off of their suggested speed or amount of data without disclosing any restrictions those plans may have.
“For example,” the FTC writes, “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 issue here is simple: ‘unlimited’ means unlimited”
Tuesday’s settlement resolves a 2014 lawsuit from the FTC. At the time, the agency filed a complaint alleging that AT&T misled consumers over its data plans and how much data they would be allotted each month before having their access slowed down. “AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said former FTC Chairwoman Edith Ramirez back in 2014. “The issue here is simple: ‘unlimited’ means unlimited.”
“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,” an AT&T spokesperson told The Verge.
In the summer of 2015, the Federal Communications Commission fined AT&T $100 million for similar deceptive marketing practices involving its data plans. According to the FCC, the agency received thousands of consumer complaints that led them to investigate the throttling allegations.
“AT&T promised unlimited data—without qualification—and failed to deliver on that promise,” Andrew Smith, the FTC’s Bureau of Consumer Protection director said in a statement. “While it seems obvious, it bears repeating that Internet providers must tell people about any restrictions on the speed or amount of data promised.”
Updated at 1:15 p.m. ET 11/5/2019: Included statement from AT&T.