AT&T to pay $60M in settlement of FTC data throttling case
The U.S. Federal Trade Commission on Tuesday announced AT&T will pay out $60 million to settle a case alleging the carrier slowed down, or throttled, data transfer speeds of customers subscribed to unlimited plans.
The settlement will be placed in holdings to finance partial refunds for current and past customers who saw data speeds throttled after hitting an undisclosed data cap, reports Reuters. Specifically, the settlement applies to subscribers who committed to unlimited plans prior to 2011.
The director of FTC's Bureau of Consumer Protection Andrew Smith in a statement suggested the second-largest U.S. carrier by subscribers purposely misled customers when it implemented the strategy designed to save bandwidth.
"While it seems obvious, it bears repeating that internet providers must tell people about any restrictions on the speed or amount of data promised," Smith said.
Alongside the $60 million payout, AT&T advertisements and representations about data transfer speeds or amount of available data must be accompanied by information regarding restrictions of said features, the report said. The FTC is looking to avoid a repeat of the data throttling imbroglio that led to its action against AT&T some five years ago.
In charges leveled in 2014, the FTC alleged AT&T intentionally failed to notify customers, particularly those subscribed to unlimited data plans, of its data slowdown scheme. At the time, the carrier applied a network provision to heavy data users that caused transfer speed to drop by as much as 90 percent. Some 3.5 million consumers, all of whom paid a premium for unlimited network access, were impacted by the measure.
AT&T settled the case in August, with FTC commissioners slated to vote on the agreement in principle on injunctive provisions and monetary relief. Today's announcement arrives nearly three weeks ahead of a Nov. 21 deadline for review.
Though it settled the case last month, AT&T was quick to point out that none of the FTC's allegations were proven in court. AT&T was "fully prepared to defend" itself in a pending legal fight, the company said, but decided a settlement to be "in the best interests of consumers."
"Even though it has been years since we applied this network management tool in the way described by the FTC, we believe this is in the best interests of consumers," AT&T said in a statement on Tuesday.
The settlement will be placed in holdings to finance partial refunds for current and past customers who saw data speeds throttled after hitting an undisclosed data cap, reports Reuters. Specifically, the settlement applies to subscribers who committed to unlimited plans prior to 2011.
The director of FTC's Bureau of Consumer Protection Andrew Smith in a statement suggested the second-largest U.S. carrier by subscribers purposely misled customers when it implemented the strategy designed to save bandwidth.
"While it seems obvious, it bears repeating that internet providers must tell people about any restrictions on the speed or amount of data promised," Smith said.
Alongside the $60 million payout, AT&T advertisements and representations about data transfer speeds or amount of available data must be accompanied by information regarding restrictions of said features, the report said. The FTC is looking to avoid a repeat of the data throttling imbroglio that led to its action against AT&T some five years ago.
In charges leveled in 2014, the FTC alleged AT&T intentionally failed to notify customers, particularly those subscribed to unlimited data plans, of its data slowdown scheme. At the time, the carrier applied a network provision to heavy data users that caused transfer speed to drop by as much as 90 percent. Some 3.5 million consumers, all of whom paid a premium for unlimited network access, were impacted by the measure.
AT&T settled the case in August, with FTC commissioners slated to vote on the agreement in principle on injunctive provisions and monetary relief. Today's announcement arrives nearly three weeks ahead of a Nov. 21 deadline for review.
Though it settled the case last month, AT&T was quick to point out that none of the FTC's allegations were proven in court. AT&T was "fully prepared to defend" itself in a pending legal fight, the company said, but decided a settlement to be "in the best interests of consumers."
"Even though it has been years since we applied this network management tool in the way described by the FTC, we believe this is in the best interests of consumers," AT&T said in a statement on Tuesday.
Comments
The US Attorney General should implement a rule that NO settlement shall ever be reached with a corporation unless they publicly admit they violated the law and this out of court settlement is SOLELY to preserve capital they would otherwise lose in the court case they could not possibly win.
A corporation is primarily an investment vehicle. It’s second and arguably more important use is to protect the people running it from going to prison for a thousand years for crimes against humanity!
Yes, this particular time no one died. But we’ve seen the exact same slithering behavior from the auto industry when people did die. And the one thing Boeing has NOT done is admit that they intentionally lied to the FAA and killed 383 people just to sell more planes. And not to put too fine a point on it the VP directly and personally responsible for all this will NEVER lose one cent or spend one decade in federal prison.
Not that I do not disagree.
Most civil cases and some criminal case are settle with no admission of guilt and everyone is sworn to secrecy. If you are every so unlucky to be in a civil case and you decide not to go to court and have it fully document for everyone to see, you will not get what you are asking for without the other side avoid any admission of guilt. This is not just a corporate things individual do it all the time as well. Think about all the cases with the churches and priests and the victim taking money to keep their mouths shut only to have the priests go off and do it to any other person. You can also say the same thing about people who took money from the Auto companies just to settle their case and keep their mouth shut.
I personally have more of an issue with the people who decided to take the money than fight their case in court and so everyone can see what really happen. Those people put more people in harms way than company who offer money to shut someone up.
I hope when you have your case against big bad corporate America, you take the moral high ground prove your case in public and be willing to walk away with nothing other than to say you proved your point. Just so no one else will every have to deal with the situation.
Leaving AT&T and theird "Unlimited" plan, having been grandfathered in from Cingular and my first iPhone back in the day, and switching over to T-Mobile, has been one of the most refreshing changes in my life since leaving Bank of America for my local credit union. Like somehow getting out of dealing with the mob.
T-Mobile doesn't advertise as being actually unlimited, but they "may" throttle you after like 28 gigs or something, which I've never even come close to reaching. That, plus allowing tethering (!) which wasn't allowed with AT&T, free international data roaming (which was a very expensive nightmare even to manage with AT&T) and other benefits costing me only 2/3 of what I was paying AT&T = a win all around.
Not sure what you're drinking but when I drink whiskey, $17 will usually by one shot.
I'd like to throttle them.