FTC Levies $40M Fine Against TracFone for Throttling Unlimited Data Customers

tracfone_4In recent months, the Federal Trade Commission has taken a significant interest in carrier throttling practices and today handed down a ruling that could have future ramifications for carriers who throttle their unlimited customers.

As reported by Re/code, the FTC has ordered prepaid wireless carrier TracFone to pay $40 million to consumers who paid for unlimited service and were then throttled after reaching certain data limits.

TracFone advertised "unlimited text, talk, and data" for $45 a month under the brands Straight Talk, Net10, Simple Mobile, and Telcel America, and until September 2013, did not clearly disclose its throttling policies that saw customers experiencing data speeds that were cut by up to 90 percent, thereby violating the FTC Act.

While this ruling only affects TracFone at the current time, there are several other carriers that have similar practices for their unlimited customers. AT&T and Verizon no longer offer unlimited data plans, but continue to provide unlimited data for many people who remain on grandfathered plans. AT&T has engaged in throttling practices for years, often cutting off customers who exceed 5GB of LTE data usage.

"The issue here is simple: when you promise consumers 'unlimited,' that means unlimited," said Jessica Rich, director of the FTC's Bureau of Consumer Protection. "This settlement means that Straight Talk, Net10, Simple Mobile, and Telcel America customers will be able to get money back from the company for services the company promised but didn't deliver."

Last year, Verizon planned to throttle its high-usage unlimited data LTE customers, sparking interest from FCC chairman Tom Wheeler, who said he was "deeply troubled" by the decision. Verizon ultimately reversed course and opted not to throttle its unlimited customers, but the FCC's attention was already roused, and the agency began questioning all carriers on their unlimited throttling practices.

The government's interest in carrier throttling practices led the FTC to file a federal complaint against AT&T in October of 2014, accusing the carrier of misleading its smartphone customers by charging them for unlimited data and then going on to reduce data speeds. Based on today's TracFone decision, AT&T may also be facing hefty fines in the future, and the FTC's ongoing involvement in carrier throttling of unlimited customers could finally put an end to the practice.

Popular Stories

iPhone 17 Pro 34ths Perspective

iPhone 17 Pro Launching Later This Year With These 10 New Features

Sunday March 23, 2025 10:00 am PDT by
While the iPhone 17 Pro and iPhone 17 Pro Max are not expected to launch until September, there are already plenty of rumors about the devices. Below, we recap key changes rumored for the iPhone 17 Pro models as of March 2025: Aluminum frame: iPhone 17 Pro models are rumored to have an aluminum frame, whereas the iPhone 15 Pro and iPhone 16 Pro models have a titanium frame, and the iPhone ...
iOS 18

iOS 18.4 Expected Next Week - Here Are the Release Notes

Friday March 28, 2025 2:01 pm PDT by
With the second release candidate of iOS 18.4 that Apple seeded out today, the company finally provided us with release notes that give a full rundown on what to expect. There's an Apple Vision Pro app, new Apple Intelligence features for notifications and additional language support, plus an Apple News Food feature for Apple News+ subscribers, and several updates that should improve the...
Magic Mouse Green

What to Expect From the Magic Mouse 3

Saturday March 29, 2025 10:15 am PDT by
Apple is reportedly working on a new Magic Mouse. Below, we recap what to expect. The two key rumors for the Magic Mouse 3 so far include a relocated charging port, along with a more ergonomic design. It was briefly rumored that the Magic Mouse 3 would also feature voice control, but that was misinterpreted information. Relocated Charging Port While the Magic Mouse switched from...
Foldable iPhone 2023 Feature Homescreen

Six Things to Know About Apple's Upcoming Foldable iPhone

Friday March 28, 2025 3:54 pm PDT by
We've been hearing rumors about a foldable iPhone for almost a decade now, but it looks like we might finally see the device come to fruition in 2026. We're going to be waiting many more months for the foldable iPhone, but so far we're hearing good things. Apple wants to make it creaseless. It's taken Apple multiple years to design a foldable iPhone that it's satisfied with because Apple ...
top stories 2025 03 29

Top Stories: WWDC 2025 Announced, iPhone 17 Pro and iOS 19 Rumors, and More

Saturday March 29, 2025 6:00 am PDT by
Apple's big developer event is a little over two months away, and rumors about what we can expect to see in Apple's next major operating system updates are becoming increasingly frequent. A public release of iOS 18.4 is also imminent with a number of updates and improvements, although we won't be getting the major Apple Intelligence Siri upgrades that had reportedly been planned for this...
iOS 19 visionOS UI Elements

Apple Codename Provides Clue About iOS 19's Rumored New Design

Sunday March 30, 2025 6:40 am PDT by
Multiple sources have claimed that iOS 19 will introduce a new design with more translucent buttons, menus, notification banners, and more, and there is now another clue that points towards this glass-like appearance. Bloomberg's Mark Gurman today said the new design project is codenamed "Solarium" internally. A solarium is a room with glass walls that allow in plenty of sunlight, so this...
Facebook Feature

Facebook's New iPhone App Feature Turns the Clock Back to 2007

Thursday March 27, 2025 1:59 pm PDT by
In the mid-to-late 2000s, Facebook was all about staying connected with friends and family. However, as the social media platform added new features and grew over time, that core experience began to get drowned out. That changes starting now, according to Meta, which today introduced a new feature that will "bring back the joy" of classic Facebook. Specifically, Meta has redesigned the...
Foldable iPhone 2023 Feature Homescreen

iPhone Foldable Display Said to Feature iPad-Style 4:3 Aspect Ratio

Friday March 28, 2025 3:44 am PDT by
Apple's upcoming "iPhone Fold" will feature a foldable screen with a 4:3 aspect ratio, according to a Chinese leaker who previously leaked the book-style device's display dimensions. The Weibo-based account Digital Chat Station claims that Apple will adopt a "roughly" 4:3 aspect ratio on the inner display in order to achieve consistency between the outer display, as well as to ensure parity...

Top Rated Comments

jtrenthacker Avatar
133 months ago
Everyone to whom throttling would be relevant knows about throttling, and nows the carriers do it. And its in the contract that they can do it. It's not like this stuff is a secret. So they did it on some people, and those people are now pissed because they don't like the terms of the contract that they signed anymore. But worry not, bureaucrats to the rescue. Let's just steal their money back because they're not happy with their decision anymore.

Losers. :rolleyes:

Are you the AT&T customer service rep I talked to the other day? Huh, small world.
Score: 32 Votes (Like | Disagree)
GrecoISU Avatar
133 months ago
Everyone to whom throttling would be relevant knows about throttling, and nows the carriers do it. And its in the contract that they can do it. It's not like this stuff is a secret. So they did it on some people, and those people are now pissed because they don't like the terms of the contract that they signed anymore. But worry not, bureaucrats to the rescue. Let's just steal their money back because they're not happy with their decision anymore.

Losers. :rolleyes:

You're so cute! :rolleyes:
Score: 27 Votes (Like | Disagree)
k1121j Avatar
133 months ago
its about time they make them honor "Unlimited" its not if its limited. I'm surprised its gone on this long
Score: 26 Votes (Like | Disagree)
jtrenthacker Avatar
133 months ago
GOOD! I hope they fine the hell out of all of them. I'm an unlimited customer with AT&T and I've now been bitten by their throttling practices. We just recently moved across the country. Before the move, I worked at a university that had campus wide wifi and of course I had wifi at home. Between the two, I hardly ever used LTE. After we moved, we were without internet for three weeks. I would use the LTE for everything on my phone including Netflix. Soon I was getting texts that I will be throttled if I go over 5gb. Sure enough, eventually LTE became almost unusable. Then last week, I start getting texts, emails, and an actual letter telling my to stop tethering! Mind you, we've had internet at the house for a couple weeks now. I have never used tethering. They say if I continue they will change my plan without my consent. I called the customer service line and bitched about it. They didn't really apologize. They just tell me my plan will stay the same and that there may be apps on my phone that act like tethering (total BS). We have never had a bad experience with AT&T until now. All because I went over 5gb in data on my UNLIMITED plan? Kiss my att.
Score: 25 Votes (Like | Disagree)
HobeSoundDarryl Avatar
133 months ago
OK FTC, but dole out the fines to more than just the cheap(est) players. It will be wrong to fine a player like this while allowing AT&T, Verizon etc to carry on without fines. Of course, AT&T & Verizon make big campaign contributions so lets see if the Gov punishes wrongdoing or if this "wrongdoing" is defined as not contributing enough to campaigns.

Seems odd that a relatively small player would get a headline fine for throttling while the much bigger, much deeper pocketed players are left out.
Score: 17 Votes (Like | Disagree)
ArtOfWarfare Avatar
133 months ago
Can we do something about the regional broadband monopolies (IE, Comcast, Verizon, Time Warner?) They concern me more than the cellular providers, which at least compete with each other so have some interest in screwing over their customers less so that people will switch.
Score: 13 Votes (Like | Disagree)