The Federal Trade Commission recently filed a complaint against AT&T Mobility LLC in the Northern District of California, alleging that AT&T misled consumers by failing to adequately disclose to consumers subscribed to its “unlimited” mobile data plans that AT&T would reduce, or “throttle,” their data speeds by as much as 90% if they used more than a certain amount of data in a given billing cycle. The FTC alleges the throttling was widespread, affecting at least 3.5 million customers. The FTC cites many consumer objections–for example, according to one consumer, “unlimited means without restriction, [but] AT&T slowing the speed of data by 90% is RESTRICTING my data.” The complaint charges that AT&T violated the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans. In addition, if and when consumers canceled their contracts after being “throttled,” AT&T charged those customers early termination fees. Notably, the FTC offers alternative ways AT&T could have reduced data usage on its network that would not violate its promise to customers, including by requiring existing unlimited plan customers to switch to a tiered plan when their plan was up for renewal.
TIP: Advertisers should honor material promises made to consumers in advertising for their services, or at the very least, provide consumers with notice of any changes to the material terms pursuant to which the services will be provided, and the option to opt-out of those services before such changes take effect.