FTC Sues AT&T for 'Unlimited' Data Plans That Allegedly Misled Millions

Oct 28, 2014 03:06 PM EDT | Jordan Ecarma

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Federal regulators are suing AT&T for allegedly deceiving millions of subscribers who paid for unlimited data plans but were "throttled," some experiencing data speeds slowed by nearly 90 percent.

The Federal Trade Commission claims the telecommunications company did not sufficiently warn smartphone customers that their Web pages, navigation and videos would be slowed down even under "unlimited" data subscriptions, the Associated Press reported.

"AT&T promised its customers 'unlimited' data, and in many instances, it has failed to deliver on that promise," FTC Chairwoman Edith Ramirez said in a statement. "The issue here is simple: 'unlimited' means unlimited."

The FTC says that AT&T highlighted supposedly unlimited data in its marketing campaigns while neglecting to tell its customers that they would be throttled after a certain point.

"When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars," the agency said in a press release.

Throttling, or substantially slowed data speeds, occurred when subscribers had used as little as 2 gigabytes of data in a billing period and resulted in speeds that were slowed by 80 to 90 percent, according to the FTC.

For its part, AT&T has denied the allegations.

"The FTC's allegations are baseless and have nothing to do with the substance of our network management program," Wayne Watts, AT&T general counsel said in a statement provided to Mashable. "It's baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts."

Mashable noted that throttling is not illegal per se; rather, the FTC has taken issue with AT&T's purportedly misleading communication with customers regarding data caps.

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