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| 'Bait-and-switch scam': AT&T fined $60m over data throttling allegations | |
| (about 2 hours later) | |
| FTC alleged world’s largest telecoms firm, which had revenues of $170bn last year, reduced data speeds if customers used too much | FTC alleged world’s largest telecoms firm, which had revenues of $170bn last year, reduced data speeds if customers used too much |
| AT&T, the world’s largest telecommunications company, will pay $60m to resolve US allegations it misled millions of smartphone customers by charging them for “unlimited” data plans but reducing data speeds if they used too much, the Federal Trade Commission (FTC) said on Wednesday. | AT&T, the world’s largest telecommunications company, will pay $60m to resolve US allegations it misled millions of smartphone customers by charging them for “unlimited” data plans but reducing data speeds if they used too much, the Federal Trade Commission (FTC) said on Wednesday. |
| FTC commissioner Rohit Chopra called AT&T’s actions a “massive fraud”. “AT&T’s bait-and-switch scam is a good window into the many harms that result from dominant companies operating without the discipline of meaningful competition,” Chopra said in a statement. | |
| As part of the settlement of the 2014 complaint, AT&T is also prohibited from making any representation about the speed or amount of its mobile data, without also disclosing any material restrictions on the data. | As part of the settlement of the 2014 complaint, AT&T is also prohibited from making any representation about the speed or amount of its mobile data, without also disclosing any material restrictions on the data. |
| AT&T issued a brief statement acknowledging that it had reached a settlement with the FTC. | AT&T issued a brief statement acknowledging that it had reached a settlement with the FTC. |
| “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 an emailed statement. | “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 an emailed statement. |
| The company had fought the FTC in court, saying it had no jurisdiction to bring the case, but lost in 2018. | The company had fought the FTC in court, saying it had no jurisdiction to bring the case, but lost in 2018. |
| The FTC alleged that AT&T would begin to throttle “unlimited” customers’ data use after they used as little as 2 gigabytes of data in a month. Netflix’s website says that watching its shows uses about 1 gigabyte per hour of standard definition video. | The FTC alleged that AT&T would begin to throttle “unlimited” customers’ data use after they used as little as 2 gigabytes of data in a month. Netflix’s website says that watching its shows uses about 1 gigabyte per hour of standard definition video. |
| Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said AT&T made promises it did not keep. “While it seems obvious, it bears repeating that internet providers must tell people about any restrictions on the speed or amount of data promised,” he said in a statement. | Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said AT&T made promises it did not keep. “While it seems obvious, it bears repeating that internet providers must tell people about any restrictions on the speed or amount of data promised,” he said in a statement. |
| The $60m represents a small sum for AT&T, which had revenues of over $170bn last year. It will be deposited into a fund to provide partial refunds to both current and former customers who had signed up for unlimited plans prior to 2011 but had their data speeds reduced, or “throttled” by AT&T when their usage went past a certain threshold. | The $60m represents a small sum for AT&T, which had revenues of over $170bn last year. It will be deposited into a fund to provide partial refunds to both current and former customers who had signed up for unlimited plans prior to 2011 but had their data speeds reduced, or “throttled” by AT&T when their usage went past a certain threshold. |
| Chopra said he would push for big companies to be held responsible for failing to live up to agreements. “Scammers come in all sizes,” he said in a statement. |