FTC says AT&T misled customers over unlimited data

WASHINGTON (AP) — AT&T is being sued by the government over allegations it misled millions of smartphone customers who were promised unlimited data plans but instead experienced slow speeds while browsing the Internet or watching streaming video.

The Federal Trade Commission says AT&T Mobility Inc. failed to adequately disclose to customers that it would reduce data speeds if they went over a certain amount of data use in a billing cycle. The practice, known as throttling, slows down things like web browsing, GPS navigation or streaming videos.

According to the complaint filed in federal court in San Francisco on Tuesday, about 3.5 million consumers have been affected. Some customers had data speeds slowed by nearly 90 percent, the FTC said.

The commission says AT&T began throttling customers on unlimited data plans in 2011.

AT&T denied misleading customers.

"We have been completely transparent with customers since the very beginning," Wayne Watts, senior executive vice president and general counsel for AT&T, said in a statement. "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."

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