AT&T Loses California Case After Lying To Consumers About 'Unlimited' Data Throttling

from the ill-communication dept

Back in 2014 the FTC sued AT&T for selling “unlimited” wireless data plans with very real and annoying limits. The lawsuit noted that, starting in 2011, AT&T began selling “unlimited” plans that actually throttled upwards of 90 percent of your downstream speeds after using just two or three gigabytes of data. AT&T spent years trying to wiggle out of the lawsuit via a variety of legal gymnastics, including at one point trying to claim that the very same net neutrality and FCC Title II rules AT&T was trying to kill prevented the FTC from holding it accountable.

Nearly a decade after the battle began, the company agreed last fall to a $60 million settlement with the FTC without actually admitting any wrongdoing. That $60 million, after lawyers get a cut, will be split among millions of customers who signed up for AT&T unlimited data plans before 2011. Moving forward, AT&T also has to clearly disclose any limits on its “unlimited data plans” in a conspicuous manner (read: not hidden via fine print or embedded in a hyperlinked asterisk).

But AT&T took another hit last week in a different five-year-old case in California over the throttling. There, AT&T’s attempt to ban consumers from suing it for bad behavior was initially upheld by a court ruling in 2016. But a 2017 California Supreme Court decision effectively changed the state’s arbitration law, resulting in that AT&T victory being overturned in 2018. AT&T appealed that decision but last week lost the appeal, allowing the case to proceed:

“AT&T appealed that ruling to the US Court of Appeals for the Ninth Circuit, but a three-judge panel at that court rejected AT&T’s appeal in a ruling issued Tuesday. Judges said they must follow the California Supreme Court decision?known as the McGill rule?”which held that an agreement, like AT&T’s, that waives public injunctive relief in any forum is contrary to California public policy and unenforceable.”

“Because we are bound by our decision in Blair [another case involving the McGill rule], we hold that AT&T’s arbitration agreement is unenforceable. Accordingly, we affirm the district court’s order denying AT&T’s motion to compel arbitration,” judges wrote Tuesday.”

While class action lawsuits certainly have problems (lawyers getting new boats while plaintiffs get pennies being chief among them), they have been known to shift corporate behavior now and again. And however flawed the US class action system is, the binding arbitration system is arguably worse, giving even more power to giant corporations like AT&T, who’ve already successfully lobbied federal consumer protection and antitrust enforcement into an apathetic coma.

Folks upset at states amping up their consumers protection efforts (see: net neutrality, privacy) should place the blame where it belongs: a wholly corrupted federal government that threw serious consumer protection and corporate accountability overboard thirty to forty years ago.

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Companies: at&t

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Comments on “AT&T Loses California Case After Lying To Consumers About 'Unlimited' Data Throttling”

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19 Comments
Anonymous Coward says:

Thank You

From the above: "a wholly corrupted federal government that threw serious consumer protection and corporate accountability overboard thirty to forty years ago. " Implying that both U. S. political parties are at fault.

As a critic of both the Republicans and the Democrats, I wish to say thank you for the above criticism. (I strongly agree) It is time to recognize that both parties are self-serving. Further, both parties will cover for one-another, in order to promote the status-quo. I recognize that the current extreme polarization of politics in the U. S. makes this difficult.

Nonetheless I think it is worth while to say "Thanks" when thanks is due.

Anonymous Coward says:

Re: Thank You

"Further, both parties will cover for one-another, in order to promote the status-quo. I recognize that the current extreme polarization of politics in the U. S. makes this difficult. "

The two parties work toward a common goal of dominance over the people, the methods employed vary but do seem to follow a pattern in which one party is much more tolerant of abusive behavior than the other party. The polarization to which you refer occurs in the masses and is typically there due to the provocations of the politicians. Politicians may tell you about all their personal beliefs/opinions but we all know they are lies. They take a position that will benefit their political standing and it has nothing to do with morals/ethics/logic.

TLDR: There are assholes in every crowd.

tz says:

Arbitration can be far worse than class action if the aggrieved figure it out.

https://www.courthousenews.com/judge-accuses-doordash-of-trying-to-squirm-out-of-arbitration/

Door Dash now has to spend $11M in arbitration fees – CA limits the consumer to $250, and it is $1500 just to start an arbitration, and 10x that minimum to get to an arbitrator, all but the $250 paid for by the company.

Indegogo also found this out the hard way when they cancelled Alt-Hero comics.

And there have been other cases. You can easily bankrupt a company via arbitration claims.

There are a few more landmines for corporations, but I didn’t know about the one that hit AT&T.

Anonymous Coward says:

Re: Re: Re:

It varies by State, court, and sometimes case type and size. Sometimes less, sometimes more. The fee isn’t really the point. In arbitration you have no effective appeal from legal errors, no jury and no right to proper discovery (it’s all up to the arbitrator). DoorDash just didn’t want to pay the costs of arbitration for all those cases, which are much greater than $250 for the company

Anonymous Coward says:

an agreement, like AT&T’s, that waives public injunctive relief in any forum is contrary to California public policy and unenforceable.

How is this just a California thing? The First Amendment specifically says that the people have a right to petition the government for the redress of grievances. Any agreement that a company attempts to force upon you saying otherwise is unconscionable and (should be) 100% unenforceable.

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