California’s Ninth Circuit Court of Appeals on Monday dismissed a Federal Trade Commission lawsuit that accused AT&T of deception in throttling data speeds for its unlimited customers.
In its 2014 lawsuit, the FTC alleged AT&T failed to adequately disclose its data throttling practices to customers and as a result engaged in “unfair or deceptive acts or practices” when it slowed data speeds for heavy users on its unlimited plans.
The FTC argued such a practice was barred under section 5 of the FTC Act, while AT&T claimed it was exempt from liability under that provision due to its status as a “common carrier.” AT&T previously filed a motion to dismiss the lawsuit, but that was denied by the district court.
Before the appeals court, AT&T argued its common carrier status under section 5 covers even non-common carrier activity. The FTC, on the other hand, argued the common carrier status should be an activity-based exemption that applies only to common carrier activities.
The appeals court on Monday sided with AT&T, concluding “based on the language and structure of the FTC Act, that the common carrier exception is a status-based exemption and that AT&T, as a common carrier, is not covered by section 5.”
With its opinion, the appeals court reversed the district court’s denial of the motion to dismiss and remanded the case for an order of dismissal.
In a statement to Reuters, the FTC said it was “disappointed” with the decision and is currently considering its options for moving forward.
AT&T’s current unlimited data plan – which is available to DirecTV and U-verse subscribers – caps high speed data for heavy users at 22 GB. But AT&T isn’t alone in offering an unlimited plan with limits.
Both T-Mobile and Sprint also throttle data on their unlimited plans past thresholds of 26 GB and 23 GB, respectively.
Verizon does not offer an unlimited plan.
Filed Under: Industry regulations