Federal Trade Commission Claims AT&T Has Misled Consumers with “Unlimited” Data Plans

On October 28, 2014, the Federal Trade Commission (“FTC”) filed a complaint against AT&T in the U.S. District Court for the Northern District of California, alleging it sold consumers unlimited smartphone data plans without telling them it would slow Internet speeds once consumers reached a certain amount of data in a particular billing cycle. The FTC alleges this practice of data “throttling” reduced Internet speeds by up to 90% in some instances. It also alleges that AT&T violated the FTC Act by changing the terms of consumers’ unlimited data plans during contract periods, and by failing to fully disclose the specifics of the practice of throttling to consumers renewing unlimited data plans. Finally, the FTC alleges that when customers cancelled contracts due to slowed Internet speeds, AT&T charged high early termination fees.