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Bad News if You Wanted to Sue AT&T Over Throttling Unlimited Data

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Pedestrians walk past an AT&T store in Washington, D.C. on April 21, 2015.Photograph by Andrew Harrer/Bloomberg via Getty Images

This story has been updated with AT&T’s response.

A federal judge has ruled that AT&T customers who were unhappy over its data throttling practices will not be able to pursue a class-action lawsuit against the company.

In his ruling, U.S. District Court Judge Edward Chen said consumers had all signed contracts with AT&T (T) that lets the company settle individual disputes through arbitration. “The parties do not dispute that Plaintiffs entered into contracts with AT&T in order to obtain wireless service. The parties also do not dispute that each of the agreements contained an arbitration provision,” Chen said in his ruling as first reported by Media Post.

The ruling was over a class action that claims from 2011 until 2015, AT&T throttled more than 3.5 million customers who exceeded monthly data usage of 3GB or more. The suit alleges that went against the “unlimited” label on its data plans.

 

Consumers who want to bring a dispute now have to go through arbitration, a route usually preferred by companies as the potential payouts are significantly smaller, and thus acts as a deterrent for consumers.

A Supreme Court decision in 2011 paved the way for AT&T to use arbitration to settle matters rather than allowing claims to be brought to court as a group. In this recent suit, plaintiffs were trying to argue the enforcement of arbitration would violate First Amendment rights to petition a court to address grievances.

However, the Federal Trade Commission and the Federal Communications Commission both are still seeking millions in either refunds or fines over AT&T’s data-throttling. AT&T has since revised its terms and conditions over its unlimited data plans, and will only slow down customers who exceed 22 GB in a month and when the network is congested.

AT&T spokesperson Fletcher Cook said the arbitration process would help consumers address any concerns. “AT&T has been widely recognized for having one of the most consumer-friendly arbitration policies in the country. One federal court said AT&T’s arbitration agreement has “perhaps the most fair and consumer-friendly provisions this Court has ever seen,”” Cook told Fortune.