Court allows FTC to move forward with data-throttling case against AT&T

Court allows FTC to move forward with data-throttling case against AT&T
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A federal appeals court ruled on Monday that the Federal Trade Commission (FTC) can move forward with its lawsuit against AT&T over allegations the company deceptively slowed data for some of its customers.

The decision also affirms the FTC’s authority to police internet service providers, an issue that had been in question amid the Federal Communications Commission’s (FCC) repeal of its net neutrality rules. The FCC's net neutrality repeal handed oversight of internet service providers to the FTC, but critics said that would create an enforcement gap.

“I welcome the 9th Circuit’s ruling as good news for consumers,” Maureen Ohlhausen, the FTC’s acting chairwoman, said in a statement. “It ensures that the FTC can and will continue to play its vital role in safeguarding consumer interests including privacy protection, as well as stopping anticompetitive market behavior.”

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The FTC sued AT&T in 2014 alleging that it had deceived subscribers of unlimited data plans by throttling their download speeds once they reached a certain threshold. In 2016, a partial 9th Circuit Court of Appeals panel ruled in AT&T’s favor, saying that the FTC did not have the authority to take enforcement actions against so-called common carriers, such as companies that offer phone services.

The court later vacated that decision, making way for Monday’s ruling by the full court upholding the FTC’s jurisdiction over internet providers.

“Today’s decision on jurisdiction does not address the merits of the case,” an AT&T spokeswoman said in a statement. “We are reviewing the opinion and continue to believe we ultimately will prevail.”

The case had received renewed interest as the FCC advanced its repeal of the 2015 net neutrality rules, a move intended to return authority over broadband companies to the FTC. Net neutrality supporters argued that it was reckless for the FCC to move forward with its repeal while the question of the FTC’s authority was still up in the air.

“The 9th Circuit’s decision is a significant win for American consumers,” FCC Chairman Ajit Pai said in a statement. “Among other things, it reaffirms that the Federal Trade Commission will once again be able to police Internet service providers after the Restoring Internet Freedom Order takes effect.”

Still, Monday’s decision is unlikely to assuage the concerns of net neutrality supporters, who believe the FTC is ill-equipped to police companies like AT&T and Comcast on its own.

“Some have tried to portray today’s decision as somehow lessening the disastrous effects of the FCC’s recent net neutrality repeal,” said Harold Feld, senior vice president of Public Knowledge. “This is entirely backward. This case illustrates the problem of having the Federal Trade Commission try to do alone what it should do in partnership with the FCC.”