AT&T fined $60 million for throttling ‘unlimited’ data plans

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.”

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.

Comments

Maybe they should just price based on speed like the ISPs (minus the quota)

Now they tell you after a certain amount you will get throttled if there is congestion . when this suit was placed they did not do that.

About 3 years ago I was using T-Mobile and they said "you have 4G/LTE for up to 20GB. After that, it’s unlimited but throttled". I changed after a year to Google Fi which was horrible, then back to T-Mobile – when I asked them they said "you’re getting Unlimtied 4G/LTE" and specifically asked them if they would throttle after 20GB and they said "no". Wonder if it’s true though! So far, so good.

It’s throttled now after 50GB, I believe. Check the fine print, it’s still there!

I tried T-mobile two years ago but I didn’t like how their restrictions on streaming HD video also affected the download speed of audio, including podcasts.

I know you can disable the video throttling, though I wonder if that applies to audio. However it’s not particularly relevant for audio, because you can stream uncompressed lossless with just a 2mbps connection, so the throttling will basically only affect downloads.

This will totally get AT&T to do something, not. They just released their 3rd quarter results and net income was $3.7 billion (revenue was $44.59 billion).

$60 million is a rounding error and a joke. A real penalty would be to hit them with a fine for all net income for a quarter on the 1st infraction then increase by a half year (2 quarters) for every following infraction. That would be what a non captured/corrupted regulatory body/system would be able to do. JMHO…

Exactly. Came to say the same thing. They will not change if they can write off these fines as the cost of doing business. If we fined these companies what they should be charged then maybe we could fix some of the problems this country has. And make these companies think twice before ripping off their customers.

I think AT&T is doing thin enough margin-wise to care about this. This is also the one odd kind of cases where nobody is doing it anymore, and FTC is just making sure there is some consequence to past violation.

Don’t know why this had to be said. What company today wouldn’t shrug this off in the same light? The government is no longer beneficial to the people it serves when it comes to overly powerful corporations.

Well, they have all that sweet personal location data selling cash to fall back on, so no problem… =:-o

Those are worth much less than you imagine…

This fine is obviously a small fraction of what ATT saves by throttling. A joke of a fine.

Why not include the rest of the carriers? They all do this. They all disclose it in the fine fine print. ISPs don’t do this. They just charge an arm and a leg when you go over your cap.

Where’s my money??? When they started doing this my phone transformed into a useless brick for most of the month. The speed would be reduced by so much that even GIFs wouldn’t load.

This is a somewhat confusing article.

Is the $60M in addition to the $100M from 2015?

Also, what do customers (who have pre-2011 unlimited data plans) need to do to get the ‘partial refund’?

"The issue here is simple: ‘unlimited’ means unlimited."

That is the issue and this still doesn’t solve it. This cartel shouldn’t be allowed to advertise something as "unlimited" and then caveat their way out of that claim with fine print.

Now I wonder… when does Ajit Pai try to claw back the oversight he tossed to the FTC as part of his gift to the industry?

Maybe if legislators passed bills requiring boards to make it compulsory that any fines levied for offenses on CEOs’ watches are drawn from CEOs’ pay packages, so that it may well take years for the bigs to see a penny for their actions, the devious would…. Ah, nevermind. Revolving doors, etc.

when can I expect my 75 cents? I’m still grandfathered into unlimited data

Verizon is up next right?

$60 million isn’t nearly enough considering how many customers were impacted and for how many months. If I remember correctly, I had to finish off over a year on my AT&T contract once they implemented this. That’s a whole year that my service plan didn’t provide the unlimited service I signed up for when I signed the contract which meant I used much less data than I would have otherwise used and didn’t really get what I bargained for. I’m certainly not alone there, but it still pisses me off 10 years later. So what is that per user? A few dollars? Even though they were charging me $60 or $70 a month for a year for a service they were no longer providing. This fine is nothing. In retrospect, I should have sued them in small claims court.

They got that in their couch cushions in the executive lounge. What a slap on the wrist.

Oh look… AT&T doing something shady, again. The best thing I ever did was move my companies end users to Tmo (around 500 nationwide). Service is just as good but I dont feel like I’m taking it in the rear repeatedly. Better experience, better plans and I feel wanted and appreciated. I literally hate AT&T with all of my soul.

Did I mention AT&T sucks and that I couldnt get my contract reviewed and updated after trying for 11 months? Whole company is a joke, all they care about is wireline business and pushing HBO.

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