Court rules FTC data-throttling lawsuit against AT&T can proceed

AT&T has been involved in a long-running battle with the Federal Trade Commission (FTC). In 2014, the agency sued AT&T for throttling its customers' unlimited mobile data plans while not properly informing them it would be doing so. A few months later, the company claimed that its common carrier status meant it wasn't under the jurisdiction of the FTC and it asked a court to dismiss the agency's suit. In 2015, a judge rejected the carrier's claim, but in 2016, a three-member Ninth Circuit appeals court tossed out that ruling and the FTC's lawsuit saying that AT&T's common carrier status did indeed exempt it from the FTC's regulatory jurisdiction. And that brings us to today. As the Wall Street Journal reports, a federal appeals court has ruled that the FTC can proceed with its lawsuit, rejecting the Ninth Circuit court's earlier decision.

The ruling of the full-panel Ninth Circuit appeals court backs the FTC's original argument, which says that because the services in question weren't part of the those that fall under AT&T's common carrier status, its lawsuit is valid. While it no longer appears to be, at one point, this was a two-pronged assault. In 2015, the Federal Communications Commission (FCC) announced that it would be slapping the company with a $100 million fine for its deceptive practices -- a move that AT&T challenged. That fine, however, was never collected and it probably never will be. When the FTC appealed the Ninth Circuit court's decision last year, the FCC filed an amicus brief in support of the FTC. In it, referring to the FCC's original decision to issue a "Notice of Apparent Liability" against AT&T for the throttling, the agency said, "A majority of the FCC's current commissioners dissented from the decision to issue the NAL and no further action has been taken on it."

The FTC's lawsuit seeks reimbursement for the AT&T customers who had their data service throttled. FTC Chair Maureen Ohlhausen said in a statement, "I welcome the Ninth Circuit's ruling as good news for consumers. It ensures that the FTC can and will continue to play its vital role in safeguarding consumer interests including privacy protection, as well as stopping anticompetitive market behavior." FCC Chair Ajit Pai said, "The Ninth Circuit's decision is a significant win for American consumers. Among other things, it reaffirms that the Federal Trade Commission will once again be able to police internet service providers after the Restoring Internet Freedom Order takes effect."

An AT&T spokesperson told Reuters, "Today's decision on jurisdiction does not address the merits of the case. We are reviewing the opinion and continue to believe we ultimately will prevail."