It’s been a busy month for AT&T’s legal team. After agreeing to pay $105 million to settle a cramming dispute with the Federal Communications Commission and the Federal Trade Commission earlier this month, the nation’s second largest wireless provider is now on the receiving end of a lawsuit from the latter commission regarding data throttling.
The complaint, filed by the FTC in the U.S. District Court for the Northern District of California, San Francisco Division, alleges that AT&T has misled millions of its smartphone customers by charging them for “unlimited” data plans while reducing their data speeds by nearly 90 percent in some cases.
Specifically, the commission claims AT&T failed to adequately disclose the fact that unlimited data customers would have their speeds throttled if they reach a certain amount of data used in a given billing cycle. Common mobile tasks like web browsing, GPS navigation and watching streaming video become nearly impossible to perform once throttled.
Thousands of customers have reportedly called AT&T out over the matter with some referring to it as a bait and switch tactic. When some customers got fed up with throttling and canceled their contracts, AT&T charged them early termination fees which typically amount to hundreds of dollars.
The FTC says AT&T began the practice in 2011 once customers used as little as 2GB of data in a billing period. In total, AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times.