AT&T has misled millions of smartphone customers about “unlimited” data plans, the Federal Trade Commission said Tuesday.
The FTC filed a claim in federal court against the telecommunications company on the grounds that it “throttles” the data usage of customers, meaning that they are not getting the unlimited data that AT&T advertises.
“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.”
In 2011, the company began slowing customers’ data speeds by as much as 90 percent once they reached a certain cumulative use of data during a billing period, according to the FTC, and it continues to do so today.
AT&T denied the allegations following the FTC’s announcement.
Calling the allegations “baffling,” AT&T general counsel Wayne Watts said the company has “been completely transparent with customers since the very beginning.”
Wyatt noted that the company informed unlimited plan customers of the changes in 2011 with bill notices, text messages and a national press release that resulted in nearly 2,000 news stories.
“Our contention is that those were not sufficient to provide adequate disclosure to consumers,” Ramirez said on a conference call with reporters Tuesday, declining to specify what would have constituting adequate disclosure. She also said that “we stand by our allegations and aim to prove our allegations in court.”
“What we’re challenging is the fact that AT&T marketed and sold unlimited data plans and then failed to provide unlimited service,” Ramirez said.
She also noted that AT&T would throttle data independent of concerns about network congestion. If he had reached a certain threshold for monthly data usage, “an unlimited data plan user might be accessing data in the middle of the night and at that particular moment in time there wouldn’t be any particular congestion problem at that tower,” and still have download speeds drastically slowed.
The practice mostly affected iPhone users, the FTC said, but other smartphone users were affected as well.
The FTC’s complaint was filed in the U.S. District Court for the Northern District of California, San Francisco Division.
