United States - FTC Says AT&T Has Misled Millions of Consumers with Unlimited Data Promises by Throttling Data Speeds up to 90 Percent

Citing a practice known as “throttling,” the FTC filed a federal court complaint against AT&T Mobility, LLC (AT&T), charging that the company has misled millions of its smartphone customers by charging them for “unlimited” data plans while reducing their data speeds, in some cases by nearly 90 percent.The FTC’s complaint alleges that the company failed to adequately disclose to its customers on unlimited data plans that, if they reach as little as two gigabytes data use in a given billing cycle, AT&T reduces or “throttles” their data speeds. This reduction makes many common mobile phone applications – like web browsing, GPS navigation and watching streaming video – difficult or nearly impossible to use.  When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars.The complaint charges that AT&T violated the FTC Act by unfairly 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 with the staff of the Federal Communications Commission on this case, which is now before a federal district court in California.