WASHINGTON — Three years ago, AT&T warned smartphone customers with “unlimited” data plans that their connections might be slowed if they used a lot of data. On Tuesday, the Federal Trade Commission said AT&T’s disclosure was deceptive because it was not specific enough.
The commission filed a federal lawsuit Tuesday, saying the company had misled customers by slowing the connections of people with unlimited plans after they used more than 2 gigabytes of data in a month.
For some people who hit that threshold, the FTC said, downloads were slowed as much as 95 percent, essentially making their smartphones unable to access the Internet or use certain apps.
“AT&T promised its customers unlimited data, and in many instances it has failed to deliver on that promise,” said Edith Ramirez, FTC chairwoman. “The issue here is simple: ‘Unlimited’ means unlimited.”
The commission, which has no power to impose fines, said it would seek “millions of dollars” in restitution.
AT&T called the charges “baseless” and said it had been “completely transparent” in its dealings with customers.
“We informed all unlimited data plan customers via bill notices and a national news release that resulted in nearly 2,000 news stories, well before the program was implemented,” said Wayne Watts, AT&T’s general counsel. “In addition, this program has affected only about 3 percent of our customers, and before any customer is affected, they are also notified by text message.”
The slowdowns affected 25 percent of AT&T’s 14 million unlimited data plan customers. Since 2011, when AT&T put the controls into place, data speeds have been reduced for more than 3.5 million customers on more than 25 million occasions, the FTC said.
The FTC is not the only agency to take an interest in the practice of slowing data speeds, often called throttling. In July, Tom Wheeler, chairman of the Federal Communications Commission, warned Verizon after it said it would slow data speeds of customers with unlimited data plans after they reached a certain usage level each month. Verizon subsequently abandoned the plan.