AT&T and FTC settle lawsuit over data throttling

A court filing made public on Friday reveals the U.S. Federal Trade Commission reached a settlement agreement with AT&T over allegations that the mobile carrier slowed down, or throttled, data transfer speeds of certain customers.

Filed with the U.S. District Court for the Northern District of California, the proposed order reveals AT&T and the FTC on Aug. 2 reached an agreement in principle on injunctive provisions and monetary relief. A stay was requested through Friday as the parties finalized details regarding administration of consumer redress and AT&T approval of the settlement agreement.

With an agreement in hand, the FTC and AT&T have asked the court for a 90-day stay as the proposal is presented to FTC commissioners for review. A subsequent vote on the agreement is expected to arrive by Nov. 21.

The case very nearly didn’t go forward in the first place. An appeals court effectively tossed the lawsuit in 2016 on the grounds that AT&T’s common carrier status exempted it from disclosing its throttling activity. In 2018, however, a federal court decided that the FTC could proceed with the case after noting that AT&T’s data services weren’t part of its common carrier status.

The lawsuit alleged that AT&T misled legacy unlimited data customers about its throttling plan, failing to adequately inform them that they’d see dramatic slowdowns after using a certain amount of data each month. This wasn’t really the unlimited service they’d signed up for, the FTC argued. AT&T balked at the lawsuit, arguing that few people were affected and that it notified customers of imminent throttling through text.

There’s no doubt that the wireless landscape has changed a lot since the lawsuit began. Like it or not, throttling is a staple of many US carriers, whether it’s after a given amount of general usage or for specific services like video. A settlement might not carry much weight unless it forces substantial changes to existing disclosure practices.

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