SAN FRANCISCO -- The 9th Circuit Court of Appeals will decide whether or not a group of consumers can continue with their class-action lawsuit against telecommunications giant AT&T. The consumers seek to hold AT&T legally responsible for their "data-throttling" practices.
Data-throttling is a term used to describe AT&T's practice of allegedly reducing the data of some consumers who had originally purchased unlimited data plans. Allegedly, AT&T throttled consumers’ data when their usage reached between three and five gigabytes. Between 2011 and 2015, the company allegedly throttled 3.5 million users who had purchased data plans that they perceived to be unlimited. Now, AT&T claims to only reduce the data of users who use more than 22 gigabytes within a given month. The class-action suit stems from action taken by AT&T before the company altered its data-throttling policies.
The Journal of High Technology Law
The case had been sent to arbitration by U.S. District Court Judge Edward Chen. Chen’s decision was based on the fact that the customers technically agreed to a standard of individual arbitration within the contracts they signed upon joining AT&T.
The Federal Trade Commission has been involved in regulating AT&T’s data-throttling tactics. In August, they tried to bring AT&T to court for slowing down their customers’ data, but the 9th Circuit Court rejected their suit, claiming that the FTC doesn’t possess the legal authority to sue the telecommunications giant.
Harry Shulman with Shulman Law Firm, a consumer lawyer whose expertise lies in suits against schools, colleges and vocational institutions, is currently helping solicit plaintiffs for data-throttling cases against AT&T.
Shulman said that these suits are somewhat frequent.
“I don’t think that it’s unique to AT&T, but what makes it different is the advertising," Shulman told the Northern California Record. "That, in a nutshell, is the basis of these kinds of cases that are brought against big telecommunications companies such as AT&T. The customers believe one thing only to experience something entirely different."
Schulman said that when it's unlimited data and AT&T begins to throttle a customer at a certain point, the court has to decide if it is limited or not.
"We would say it’s limited," Schulman said.
The case against data-throttling begins with an allegedly false advertisement. But even when consumers began to realize their data is being throttled, they can't just simply walk away from their contract without reaching into their wallet first, Schulman said.
“One of the problems with what AT&T did is that people who suddenly found themselves throttled couldn’t cancel their contracts because they would be exposed to an early termination fee,” said Shulman. "This, in a nutshell, explains why these consumers didn’t just leave AT&T when their data was being reduced. If there were no such thing as early termination fees, it’s possible that AT&T could have avoided all of this legal trouble."
But even with AT&T's current data-throttling policies that drastically differ from its actions from 2011-2015, the company faces an uphill climb toward exoneration, Schulman said.
“So it’s sort of a ‘gotcha’ situation where as they’re saying hey, you’re gonna pay one way or the other," he said. "Which way do you prefer?”