Court Ruling Allows Data-Throttling Lawsuit against AT&T® to Proceed

AT&T^®, one of the best internet providers, has been embroiled in a long-running battle with the Federal Trade Commission (FTC). This started in 2014, when the agency sued the company saying it was throttling the unlimited mobile data plans provided to customers, while not telling said customers that it would be doing so.

A few months after that, the company came out with the claim that the common carrier status it held ensured that it was not under the FTC’s jurisdiction, and then asked the court to dismiss the agency’s suit. The carrier’s claim was rejected by a judge in 2015, but then a year later in 2016, this ruling was tossed out by a three-member Ninth Circuit appeals court.

At the time, it was ruled that the common carrier status did indeed exempt AT&T^® from the FTC’s regulatory jurisdiction. This had been the final verdict, until present day. The latest development is that a federal appeals court has ruled the FTC can proceed with the lawsuit, disregarding the Ninth Circuit court’s earlier decision.

The ruling from the full-panel Ninth Circuit appeals court reinforces the FTC’s original argument, which put forward that because the services in question did not fall under the AT&T’s common carrier status, the lawsuit hold valid. This was at one point a two-pronged attack, although it no longer appears to be. Back in 2015, the FCC had announced that it would be fining the company for $100 million for deceptive practices, which at the time the carrier challenged. The fine was never collected, and AT&T^® seems to have dodged the bullet for good.

When the FTC appealed the Ninth Circuit court’s decision in 2017, the FCC filed an amicus brief in support of it. In this, referring to the original decision to issue a liability notice against the company for throttling, FCC said, “A majority of the FCC’s current commissioners dissented from the decision to issue the NAL and no further action has been taken on it.”

The lawsuit FTC has brought seeks reimbursement for all customers who have had their data services throttled. FTC Chair Maureen Ohlhausen issued a statement saying, “I welcome the Ninth Circuit’s ruling as good news for consumers. It ensures that the FTC can and will continue to play its vital role in safeguarding consumer interests including privacy protection, as well as stopping anticompetitive market behavior.”

Commenting on that, a spokesperson for AT&T^® said, “Today’s decision on jurisdiction does not address the merits of the case. We are reviewing the opinion and continue to believe we ultimately will prevail.”