Throttled: TracFone Enters $40 Million Settlement with FTC over “Unlimited” Plans
Last week, the FTC concluded a $40 million settlement with TracFone – the largest prepaid mobile provider in the U.S. – over allegations that the company throttled customers’ purportedly unlimited data plans. The FTC alleged that TracFone advertised $45 per month unlimited plans, but systematically throttled and/or suspended customers’ connections after they passed a certain usage threshold, in violation of Section 5 of the FTC Act, which prohibits “unfair and deceptive” trade practices.
The landmark settlement is indicative of vigorous enforcement by the FTC in the mobile broadband space. Our advisory provides an analysis of the settlement and items of note for other companies considering similar claims or related business practices in the broadband space.