Categories Finance, Other Industries

AT&T loses case to FTC over regulation loophole

A federal court has issued a ruling which hopes to put to rest a case that seems to have been going on forever.

The Federal Trade Commission (FTC) filed a suit against AT&T in 2014 accusing the telecom company of slowing down its ‘unlimited’ data plans and misleading consumers.

However, AT&T claimed that it was exempt from the Federal Trade Commission’s authority on virtue of being a common carrier. Common telecom carriers come under the jurisdiction of the Federal Communications Commission (FCC).

The net neutrality debate in 2015 also put more meat on the bones for AT&T.

Courtesy : Wikimedia Commons

AT&T went on to argue that the non-network parts of its business, like advertising, should also be free from the FTC’s control as they supported the network business. AT&T actually won this argument in 2016 dealing a major blow to the FTC.

Meanwhile, consumer protection advocates wailed that any leading company could acquire a small telecom service and declare themselves a common carrier, thus gaining immunity from the FTC and putting innocent customers at their mercy.

The catch here is that the FCC is restricted to controlling only the telecommunications part of the carrier companies.

So, with the FCC being able to oversee only the communications division of a business and the FTC being constrained from looking into any of the other businesses being run by a telecom company owner, this would have created a regulatory ‘Bermuda Triangle’. In other words, some businesses would be completely out of reach and control.

However, with today’s ruling, this fear has been quashed. The court ruled that the FTC could penalize companies for unfair business practices and the ownership of a telecommunications service would not grant them immunity from such penalty.

Also Read:  Bank of America posts EPS of 63 cents in Q2

The companies under the dominion of the FCC could very well be subject to regulation from the FTC in other aspects of their business, if deemed necessary. The court stated that there were no concerns regarding the FTC and FCC working together and sharing regulatory responsibilities if the need arises.

AT&T has managed to drag out this case for as long as possible, but hopefully this will be THE END (with no post-credit scenes).

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