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On Tuesday, the Federal Trade Commission (FTC) sued AT&T Mobility LLC over allegations the company has improperly throttled data speeds for customers who pay for “unlimited” data plans.
According to the FTC, AT&T fails to adequately disclose that when customers reach a certain amount of data use, the company will significantly reduce the data speed – in some cases by close to 90 percent – such that the customers will be unable to use many common smartphone features.
“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” FTC Chairwoman Edith Ramizez said. “The issue here is simple: ‘unlimited’ means unlimited.”
In 2007, AT&T became the only mobile data provider for the highly anticipated Apple iPhone. Initially, the company offered an “unlimited” data plan for all iPhone customers. After the release of the iPhone 3G in 2008, AT&T required all iPhone 3G customers to purchase the unlimited data plan. The company continued to require smartphone users to purchase the unlimited data plan until June 2010, when AT&T stopped offering the unlimited data plan to new smartphone customers. Instead, new smartphone customers were required to choose from one of AT&T’s “tiered” mobile data plans.
Despite the new tiered mobile data plan system, AT&T offered to grandfather existing customers’ unlimited data plans when they purchased new smartphones instead of forcing them to switch to one of the tiered plans.
“In response to this offer, millions of Defendant’s unlimited mobile data plan customers have elected to keep their unlimited mobile data plan rather than switch to a tiered mobile data plan or obtain service from another provider,” the FTC lawsuit reads.
In 2011, the FTC alleges AT&T began “throttling” the data for unlimited data plan subscribers once they exceeded a set limit of data during a billing cycle, substantially reducing the speed at which the customer’s smartphone would receive data during the remainder of the billing cycle. Initially, the limits varied across geographic markets, but in 2012, AT&T set a nationwide data usage threshold of 3 GB per billing cycle for devices using the 3G network and HSPA+ network, and 5 GB for devices using the LTE network.
Although AT&T issued an update for its unlimited data plan customers, the update indicated only that the data speeds would be reduced and did not clearly express the impact the reduced speed would have on customers’ ability to use their smartphones.
AT&T’s practice of throttling data sparked the ire of numerous consumers, who complained that “unlimited should mean unlimited” and that the practice affected their ability to stream music and videos, browse the web and use GPS navigation.
The FTC lawsuit alleges AT&T’s data throttling practice is unfair because the terms of unlimited data plans were changed while customers were still under contract and that the company deceptively failed to disclose important information about the mobile data throttling program.
AT&T customers who may be interested in pursuing an unlimited data throttling class action lawsuit may have to take a different route. In 2011, the U.S. Supreme Court upheld a company’s right to include clauses in their contracts that prohibit subscribers from filing class action lawsuits. Instead, AT&T customers can either participate in an AT&T-funded arbitration program or sue the company in small claims court.
Although consumers have been successful in pursuing these legal avenues, consumer advocates warn that clauses banning class action lawsuits are bad for consumers. Individual actions involving the same legal issues are inefficient and can lead to inconsistent rulings. Even when consumers allege very similar facts, their cases may have very different outcomes. Class action lawsuits offer one major benefit that individual actions do not: they can result in major corporate changes that benefit consumers across the nation.
In fact, a recent study by the Center for Justice & Democracy at New York Law School found that class action lawsuits are “among the most important tools we have in America” because they not only provide important remedies to consumers, but they also hold corporations accountable and deter future misconduct.
The AT&T Unlimited Data Throttling Lawsuit is Federal Trade Commission v. AT&T Mobility LLC, in the U.S. District Court for the Northern District of California.
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14 thoughts onFTC Sues AT&T for Throttling ‘Unlimited’ Data Plans
Hi I have truly unlimited when it first started. How can I join. They also accidentally canceled my third line of unlimited data and won’t give it back
I was told that they were going to turn off my data on one of the 5 phones I have on a service, plan because it was over the allowable unlimited data amount.
I am in the middle of the same mess with AT&T and my iPhone except for so long I had no clue why my speeds were so slow. I thought maybe it was the phone, maybe the service. Over the years I tried everything to get it to work better. NOW I find out it was AT&T all the while, throttling back my speed! Ok, now the most important question. HOW DO I JOIN THE CLASS ACTION SUIT? I have searched the internet for the answer to this question and have not yet found it. Thanks for any help you can provide.
I am not an attorney, but do know some laws and work/deal with some legal issues and courts as have relatives/friends who are in the legal field (attorneys, judges including a US Superior Court District and now US Superior Court Appeals judge, paralegal, etc.) , and not giving legal advise and suggest you confirm/verify with an attorney anything I say. You should contact the collection agency and dispute the AT&T charges. You should send the emails, in which the AT&T person states they will not charge you the early termination fee, to the collection agency as evidence and the collection agency should negate and remove the collection off of your record. If you need to, you can explain to the collection agency (and to AT&T) that the AT&T employee (therefore a authorized and legal representative of AT&T) who sent you the email legally (per contract law) changed the terms of your cell phone contract with AT&T (with your agreement) when they verbally and (even better) in writing (the email) stated AT&T was not going to charge you the early termination fees. Therefore the fees AT&T reported to the collection agency are invalid, so the collection agency should stop trying to collect them from you and remove them and correct your credit history report unless they want to be sued. I believe you could sue AT&T for breach of contract (due to the AT&T employee changed the terms of your agreement regarding charging the early termination fee and then AT&T charged you that fee) and for damaging your credit and for pain & suffering of having to deal with the collection agency. I am sure you would be able to find an attorney to represent you on this case, which depending on where you live I might be able to refer you to one.
Ya se sabia q AT&T reduciría la velocidad por sus pantalones en los planes ilimitados supuestamente después de los 5g. Estoy es ilegal y aun es un proceso lento q la FTC demandó por eso. Mientras pagamos mucho dinero por un servicio ilimitado q nos limitan si…. Yo soy programador y experto en sistemas y soy un heavy user y lo necesito para mi trabajo. Lo q me llama la atención esq primero no esta en el contrato q uno firma, también llamas a servicio al cliente de AT&T y te dicen q no esta en el contrato que uno firma pero q esta en la página de ellos esa cláusula. Y tampoco la encuentras, lo cual no importa porq la página la pueden modificar en cualquier momento. Pero lo interesante de todo esto es que en mi caso particular cambio a un iPhone 6 y rápido hago pruebas de velocidad y esta peor q cuando te reducen la velocidad después de los 5g y mi análisis preliminar es que están limitando poco poco desde el principio a los heavy user y lo tienen por debajo de 512 algo insoportable cuando su capability es de 23g en mi area y cuando los llamo para reportarlo me dicen q cambie de plan. AT&T quiere sacar a los ilimitados quiere cansarlos para q se vallan. Estoy hay q denunciarlo no solo en la Junta si no también exponerlos en los medios y hacer una campaña mediática para q ellos se dobleguen recuerden en la Unión esta la fuerza no dejemos q estos chupa sangre nos dominen seamos inteligentes y estratégicos porq si ellos ganan todos incluyendo las demás compañías se unirán con ellos. Por mi parte recopilo data para hacerla pública ante los medios y formarles un pequeñito revolu para poner mi granito de arena y se resuelva esto porq los q se conforman q se queden donde están q no sirven para nada y los q les preocupa q hagan su parte porq llegara el punto q no podremos usar la data como debería ser.
Wow this is great about time someone do something about them ! They own smart talk by Walmart and its even worse. Need to get T-mobile too because two weeks before your payment is due they slow it so bad you have to hope to catch a line out to the internet.
Thanks for catching these crooks!
I had the same issue as the previous comments. I would like to know when and how can I sign up for this class action suit.
I had the same experience as others and speeds cut back to on average 0.05gbs. I called and spoke and chatted for hours with tech support thinking this was issue with software upgrade done on iPhone new software that was released that well I now see used up a lot of data. They had me reset and factory reset phone numerous times, get a new SIM card, and then last resort was go to Apple it is something on there side. So Apple didn’t see any issues but still changed out iPhone for me and still after another reset nothing. Each time redownloading APPs and using more data. Finally called ATT and tech told me tong I was being throttled back for excessive data use I wish someone explained that to me two weeks prior spent so much time and headache dealing with issue. I will be leaving ATT shortly and taken family with me to another carrier. My phone was useless at speed cut back to.
I did too drop AT&T after months of inconsistently throttling my speed, sometimes a week into the billing cycle. After so many calls to them, they began calling me every two days to check on my service. I would sit there, my phone and my gf in hand, both same iPhone 4, hers tiered and mine unlimited, only two days into new billing cycle and hers was always faster than mine. Then, they blamed the device and would transfer me to Apple; Apple would test my phone, find nothing wrong wirh it and throw me back onto AT&T. It was getting so ridiculous one month they try to sell me the fact that i had used 6 gb in one billing cycle, 3 of them within 5 days and the other 3 on the remaining 26 days of the month. Clearly that was non-sense, as i was just a normal user. After many complaints and a threat to sue them like the California case, they agreed to release my contract without further costs and/or penalties. Because i know AT&T, i asked reps to e-mail me transcripts of calls and promises. Months later, they sent me to collections for unpaid fees totaling $400 for ETF. When i called to complain, with written correspondence from their reps on hand stating they would just drop my account without further charges due to the issues i was experiencing and me feeling like i was being bullied out of my grandfathered unlimited data plan (after 9 years of service), one of their supervisors stated that “the reps shouldnt have told me that and the information was incorrect”. I stated that if their information was incorrect, that was their problem ane not mine. I had written proof of such promises and statements. They try to settle for half of the amoubt, but i declined and told them they had basically bullied me out of my service as i had to switch providers since lately i couodnt even check emails on my phone due to the extremely slow speeds. All in all, im a happy Tmobile customer, with 0 problems but with a collection thanks to AT&T’s shady practices. Shame on them.
I just dropped my unlimited last month because I was being throttled to .085gbs. When I called to ask if that speed was acceptable, I got 5 different people telling me yes. They don’t have the exact number it should be throttled to, just that its 2G speeds.