A US appeals court ruled against a Federal Trade Commission (FTC) lawsuit that alleged AT&T misled subscribers over restricting their data speeds.
The Court of Appeals for the Ninth Circuit reversed a lower district court’s ruling that supported the FTC’s case that AT&T had unfairly throttled users’ internet access.
The FTC, which brought the case in 2014, claimed the US operator restricted millions of customers on unlimited data plans, after they had used as little as 2GB of data in a billing period.
The agency claimed AT&T had not sufficiently warned users they might throttle speeds, sometimes by as much as 90 per cent.
But the appeals court ruled in favour of the operator. The FTC Act, on which the agency based its case, contained a common carrier exemption in section 5.
The FTC argued AT&T was not exempt under section 5 because mobile data is not considered a common carrier service.
While the motion to dismiss was pending, the Federal Communications Commission reclassified mobile data from a non-common carrier service to a common carrier service. This classification was recently upheld in the June 2016 appeal.
AT&T argued to the lower court that the FCC’s reclassification order, although being forward-looking rather than retrospective, stripped the FTC of its authority.
The argument before the appeal court was whether the section 5 exemption should be status-driven, or activity-driven. The operator argued the former, and the court agreed. The FTC has not decided whether to appeal.
However, AT&T could still face a fine from the FCC, which in June 2015 charged the operator $100 million over data throttling. AT&T is contesting that fine.