The Federal Trade Commission has filed a federal court complaint against AT&T Mobility alleging the company misled millions of its smartphone customers, charging them for “unlimited” data plans but cutting data speeds by up to 90% when they crossed usage thresholds.
The data throttling made common mobile phone applications – like web browsing, GPS navigation and watching streaming video – difficult or nearly impossible to use.
“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said FTC Chairwoman Edith Ramirez. “The issue here is simple: ‘unlimited’ means unlimited.”
The FTC says that when customers canceled their contracts after being throttled, AT&T charged those customers early termination fees.
According to the complaint, AT&T 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. The commission said AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times.
AT&T documents also showed that the company received thousands of complaints about the slow data speeds under the throttling program, with some consumers called AT&T’s throttling program a “bait and switch.” Many consumers also complained about the effect the throttling program had on their ability to use GPS navigation, watch streaming videos, listen to streaming music and browse the web.
The complaint charges that AT&T violated the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans.
FTC staff worked closely on this matter with the staff of the Federal Communications Commission.
The complaint was filed in the U.S. District Court for the Northern District of California, San Francisco Division.
Earlier this month, the FTC also warned Verizon over similar practices.
You can read the lawsuit here.
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