AT&T Mobility, LLC settled FTC charges for reducing the data speeds (i.e., "throttling") of certain "unlimited" mobile data plans without adequate disclosure in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a) (unfair methods of competition).
According to the 2014 Complaint filed in the U.S. District Court for the Northern District of California, AT&T began throttling certain mobile data plans that were advertised as "unlimited" when the customer exceeded data usage thresholds. The FTC found that AT&T "drastically reduced service" under its throttling program, causing numerous 3G device users to experience, at one point, an 80 to 90 percent decrease in speed. The FTC alleged that since October 2011, AT&T reduced the data speeds for over 3.5 million customers over 25 million times.
Without admitting to or denying the charges, AT&T agreed to (i) pay a $60 million monetary judgment, (ii) compensate current and former customers who experienced the data throttling, and (iii) disclose any restrictions on speed or the amount of data when advertising data plans.
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