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AT&T escapes regulator's US$300m data throttling case

[SAN FRANCISCO] AT&T Inc won dismissal of a US Federal Trade Commission (FTC) lawsuit accusing the company of deceiving at least 3.5 million smartphone customers who paid for unlimited data plans only to have their download speeds cut.

A federal appeals panel overturned a lower court Monday and ruled that the FTC lacked jurisdiction to crack down on AT&T for so-called data throttling.

The agency alleged in 2014 that the carrier failed to inform customers of service slowdowns while advertising access to unlimited mobile data. The FTC sought to halt the practice and force AT&T to reimburse its customers as much as US$300 million.

Separately, the Federal Communications Commission (FCC) said in June 2015 that it was proposing a fine of US$100 million for data throttling.

The US Court of Appeals in San Francisco agreed with AT&T's argument that the FTC lacked jurisdiction over the company as a "common carrier." The three-judge panel said the FCC's net neutrality rules stripped the FTC of jurisdiction.

"We are disappointed with the ruling and are considering our options for moving forward," Jay Mayfield, an FTC spokesman, said in an e-mail.

AT&T spokesman Fletcher Cook said the company was pleased with the court's decision.

BLOOMBERG