The Federal Trade Commission has filed a lawsuit against AT&T alleging the company has deceived its unlimited data plan customers by throttling their data speeds.
Cell phone giant AT&T has been charged by the Federal Trade Commission with allegations of misleading millions of smartphone customers over ‘unlimited’ data plans. In a lawsuit filed in U.S. District Court in San Francisco, the FTC accused the wireless carrier of slowing down the data speeds of unlimited data customers dramatically once they exceeded a certain amount of usage. According to the FTC, AT&T has throttled over 3.5 million unlimited data customers without notifying them properly. In some worst cases, the data speeds were reduced by as much as 90 percent.
Specifically, the FTC’s complaint alleges that AT&T failed to inform unlimited data plan customers that their speeds would be throttled if the usage goes beyond a set data limit in a given billing cycle. The carrier began throttling unlimited customers in 2011 and the conduct is considered “deceptive” because the data speeds were throttled to such an extent that many common mobile phone applications like web browsing and video streaming became nearly impossible. In addition to this, affected customers who canceled their contracts were charged hundreds of dollars as early termination fees.
By filing this lawsuit, the FTC is seeking a court order to halt the practice, cancellation/modification of customer’s contracts, or compensation of an unspecified amount for affected customers.
AT&T, on the other hand, has denied the allegations made by the FTC. The company said that, like other major wireless providers, they also have throttling policy to manage its network resources and they have been fully transparent with customers about it. All unlimited data-plan subscribers were informed about this policy via bill notices and a national press release, prior to implementation of the program. Plus on its support website, the company has clearly stated that customers on a 3G smartphone will experience reduced speed once they exceed 3 GB of data in a billing period, while those on a 4G LTE smartphone can use 5GB of data before experiencing potential slowdowns.
Above all, AT&T claims only 3 percent of its customers are affected by this program and they are notified in advance by text message. Again, the FTC commission alleges that most unlimited data plan customers have never been notified about it via text message or email. Now that a lawsuit has been filed, the case will be decided by the court.
Cell phone giant AT&T has been charged by the Federal Trade Commission with allegations of misleading millions of smartphone customers over ‘unlimited’ data plans. In a lawsuit filed in U.S. District Court in San Francisco, the FTC accused the wireless carrier of slowing down the data speeds of unlimited data customers dramatically once they exceeded a certain amount of usage. According to the FTC, AT&T has throttled over 3.5 million unlimited data customers without notifying them properly. In some worst cases, the data speeds were reduced by as much as 90 percent.
Specifically, the FTC’s complaint alleges that AT&T failed to inform unlimited data plan customers that their speeds would be throttled if the usage goes beyond a set data limit in a given billing cycle. The carrier began throttling unlimited customers in 2011 and the conduct is considered “deceptive” because the data speeds were throttled to such an extent that many common mobile phone applications like web browsing and video streaming became nearly impossible. In addition to this, affected customers who canceled their contracts were charged hundreds of dollars as early termination fees.
By filing this lawsuit, the FTC is seeking a court order to halt the practice, cancellation/modification of customer’s contracts, or compensation of an unspecified amount for affected customers.
AT&T, on the other hand, has denied the allegations made by the FTC. The company said that, like other major wireless providers, they also have throttling policy to manage its network resources and they have been fully transparent with customers about it. All unlimited data-plan subscribers were informed about this policy via bill notices and a national press release, prior to implementation of the program. Plus on its support website, the company has clearly stated that customers on a 3G smartphone will experience reduced speed once they exceed 3 GB of data in a billing period, while those on a 4G LTE smartphone can use 5GB of data before experiencing potential slowdowns.
Above all, AT&T claims only 3 percent of its customers are affected by this program and they are notified in advance by text message. Again, the FTC commission alleges that most unlimited data plan customers have never been notified about it via text message or email. Now that a lawsuit has been filed, the case will be decided by the court.
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