The Federal Trade Commission sued AT&T on Tuesday for slowing down the internet connection of subscribers with unlimited plan.
The agency claims that the mobile internet provider slows down the internet speed once the customer reaches a certain amount of data during a billing period.
In a call with reporters Tuesday, chairwoman of FTC Edith Ramirez said, "The company has misled millions of its mobile customers, charging them for so-called unlimited data plans that were in reality not unlimited at all."
FTC said that AT&T didn't fully inform their customers that they will experience a decrease in internet speed once they exceed a certain amount of data, usually 2GB. It's a miniscule amount of data since streaming an hour in Netflix can already use 3GB of data.
Around 3.5 million customers were "throttled" by AT&T. There are alleged cases in which the internet company slowed down the internet by more than 90% that most internet activities such as online streaming and web browsing and GPS for mobile are impossible.
AT&T's general counsel, Wayne Watts, said that the FTC's claims are baseless since the company adequately informs their customers from the beginning that they will throttle the internet connection. Slowing down the internet connection after a certain data consumption is reached started in 2011.
In a statement to the Huffington Post, Watts said, "We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented."
AT&T was the only internet carrier to offer iPhone from 2007 to 2011. They terminated "unlimited" data plans in 2010, and FTC said that they failed to inform the customers who only continued their plans.
Customers who experienced slower internet connection sent complaints to AT&T. Many of them canceled their service, and in turn, AT&T went after these customers. The internet carrier charged them early termination fees that amounted to hundreds of dollars.
NPR has previously reported on AT&T throttling in 2012.
