Appeals court dismisses FTC lawsuit over AT&T throttling 'unlimited' data

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On Monday the U.S. Court of Appeals for the Ninth Circuit ordered the dismissal of a 2014 Federal Trade Commission lawsuit against AT&T, which had accused the company of misleading marketing in throttling data plans it sold to the public as "unlimited."

A lower-court ruling was upheld on the basis of an exception for common carriers, Reuters reported. AT&T still faces a potential fine from the Federal Communications Commission, which in June 2015 suggested an amount as high as $100 million.

The company allegedly failed to adequately warn customers that it would throttle heavy consumption on unlimited plans — something it has defended as necessary to keep traffic flowing. In practice, though, people on the plans sometimes saw their speeds plummet by almost 90 percent, rendering connections useless for all but a few basic functions.

Unlimited data initially helped attract iPhone buyers to AT&T, but the company phased it out as the smartphone market matured and it worried about paying for needed infrastructure. The only customers that have unlimited data now have been grandfathered in, and are shrinking in numbers thanks to slow erosion by other carriers.