Consumer protection laws are a tricky thing. They’re drafted and passed in order to prevent business from turning to unfair practices and fraud in order to trick consumers or gain an unfair competitive advantage over other businesses. However, those unfair practices and even fraudulent behavior are sometimes much more difficult to specify and prove when it comes to real-life situations. For example, there’s AT&T who decided to introduce mobile data throttling for their unlimited data customers a few years ago. Customers obviously weren’t pleased with that and some harsh accusations were made. Of course, most of them alleged that the second largest wireless carrier in the country was in violation of the aforementioned consumer protection laws. The US Federal Trade Commission (FTC) agreed and accused AT&T of deceptive business practices. The carrier argued that the controversial practices are completely fair because they were designed to only hit a small portion of its customers who are using huge amounts of data in order to create an even user experience for everyone.
However, the FTC didn’t buy that argument and filed a lawsuit over the carrier’s data throttling. AT&T’s team obviously wasn’t too happy about that so it filed a counterclaim with the US District Court in Northern California. The counterclaim wasn’t based on any reasoning backing FTC’s lawsuit but its very jurisdiction as AT&T argued that it’s a common carrier and should be regulated as such by the US Federal Communications Commission (FCC) and not the FTC. It was a bold move and – it worked. The lawsuit was dropped by a 9th Circuit panel in late August. However, the legal drama continues as the FTC has just ended up filing an appeal with the 9th US Circuit Court of Appeals.
The FTC is now arguing that it can regulate AT&T and other common carriers as long as they’re offering any non-common services, adding that this decision is setting a dangerous precedent as it threatens the Commission’s authority over other similar mobile and Internet providers like Verizon, Comcast, and Google. Certain legal experts note that this isn’t necessarily the case but that it could be interpreted as such, Ars Technica reports. In any case, the said appeals court is expected to make a decision on the matter in the coming months but no specific time frames have yet been given.