AT&T Inc. (NYSE:T) is to pay a sum of $60 million after allegations of charging its customers for ‘unlimited’ data plans but reducing the speeds for these plans.
The Federal Trade Commission announced that ATT&T allegedly reduced theses data speeds when the users used too much data. This act by the company started in 2011 when they slowed the data on unlimited plans to the extent that web browsing and normal internet operations were very slow and almost impossible to carry out. Up until 2014, 3.5 million users claimed to be affected.
The director of FTC Consumer Protection stated that it is the responsibility of internet providers to reveal all the details of their plans, including any restrictions, amount of data, and speed.
According to the FTC press release, the settlement of the AT&T entails that the company must disclose all the information regarding its data plans, and they should no longer use ‘unlimited’ to represent any of their data plans, without this disclosure.
Similar Allegations and Claims
The settlement amount will be used to refund all the affected users. The existing customers will receive a credit for the amount owed in their bills, while the former users will receive checks for the amount AT&T owed them from these unlimited plans. In an email statement, AT&T responded by stating that they conquer the FTC’s decision, and it is in the best interest of its users.
This settlement comes after a similar occurrence in 2015, where AT&T paid a fine of $100 million for similar claims. Investigations, following complaints from users, showed that the data speed was slowed for 12 days every billing cycle.
Rohit Chopra, FTC Commissioner, pointed out that AT&T is an example of companies that dominate an industry, and because of inadequate competition, they disregard some of their contractual obligations. However, AT&T strongly disagreed with Chopra, claiming that his remarks were baseless and that the said allegations were never proved in a court of law. Notably, AT&T claims that they would have opted to defend themselves in court but instead decide that it is in the best interest of the users that they make the settlement.