AT&T to pay $60 million in FTC settlement

AT&T to pay $60 million in FTC settlement
© iStock

AT&T Mobility, LLC will pay $60 million as part of a settlement with the Federal Trade Commission (FTC) after allegations that the company misled millions of consumers with its “unlimited” data plans.

The FTC filed a complaint against the company in 2014, alleging that the company did not tell consumers that if they reached a certain data threshold, AT&T would lower data speeds, according to the commission's release. The commission argued that this effort began in 2011 for users who utilized as little as 2 gigabytes of data. This policy has affected 3.5 million consumers as of October 2014. 

“As detailed in the Commission’s complaint, AT&T wanted the rewards without the risks, so it turned its offer of an ‘unlimited’ data plan into a bait-and-switch scam that victimized millions of Americans,” Commissioner Rohit Chopra wrote in a statement.

The commission said the company cannot make any public claims about speed or data without releasing information on their restrictions as part of the settlement. The release stated the disclosures are required to be “prominent, not buried in fine print or hidden behind hyperlinks.”

The $60 million will go to a fund intended to partially refund former and current AT&T customers. These consumers do not have to apply for a refund, as former customers are expected to receive checks in the mail and current customers are expected to receive credit.

AT&T told The Hill in a statement that the company appreciates “the FTC for working with us to resolve this matter.”

“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,” the statement said.

AT&T added that it "couldn't disagree more" with the Chopra's "baseless characterization of the case."

"None of his allegations were ever proved in court," the statement said. "We were fully prepared to defend ourselves, but decided settling was in the best interests of consumers."

This legal battle has continued since 2014, with AT&T recently challenging the authority of the FTC in the 9th Circuit Court of Appeals, but the company dropped its court challenge in May 2018.

--This report was updated at 1:23 p.m.