AT&T fined $60M for misleading with 'unlimited' plans

AT&T fined $60M for misleading with 'unlimited' plans”

The FTC says that the $60 million fine against AT&T will be placed into a fund and divvied out to both current and former customers affected by the misleading language. The case was over the company throttling internet speeds of customers paying for "unlimited" data plans.

According to the FTC, some customers saw throttling after just 2GB of data consumption. Current AT&T customers will automatically receive a credit to their bills; former customers will receive refund checks. A long legal battle ensued, but an appeals court judge sided with the FTC in 2018. However, the amount is about $40 million less than what the FTC had originally desired. The policy has affected 3.5 million consumers as of October 2014, the FTC said.

Chopra continued his trip down memory lane by recalling how AT&T started to get concerned in 2011 when it lost exclusivity on the iPhone and was concerned that Verizon was going to steal away its subscribers. But even then, many iPhone consumers were locked into AT&T contracts, thinking they would get unlimited data, when in reality the carrier was throttling their speeds, Chopra added. "Yet when dominant companies don't deliver on their end of the bargain, too often they can turn a profit, as their customers feel powerless to do anything about it". He also pointed out that AT&T, which had exclusivity on the Apple iPhone in the USA from 2007-2010, started offering an unlimited data plan for $30 per month in 2008 when the iPhone 3G was launched.

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Under this new settlement, AT&T will no longer be able to make claims about the speed or amount of mobile data, including that it is "unlimited", without revealing relevant restrictions.

You can now find those disclosures on AT&T's latest unlimited data plans, which were introduced last week. The company is also barred from marketing plans off of their suggested speed or amount of data without disclosing any restrictions those plans may have. Your video streaming can also be capped to standard definition (480p).

"The AT&T throttling scandal is an important case study into how dominant firms operating without meaningful competition can easily renege on their contractual obligations and cheat consumers who have nearly no recourse", FTC Commissioner Rohit Chopra said in a statement Tuesday. Throttling was allegedly initiated after customers used as little as 2 gigabytes of data in a billing period, the FTC said in a press release today. "AT&T's massive scam is a reminder that we must focus on the practices of a business, rather than the size of a business", he added.

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