FEDERAL TRADE COMMISSION v. AT&T MOBILITY LLC - Ninth Circuit

Headline: In determining whether AT&T Mobility was immune from FTC regulation concerning its data-throttling plan, the Ninth Circuit, sitting en banc, held that the FTC Act’s common-carrier exemption was “activity based,” meaning that a common carrier is exempt from FTC jurisdiction only with respect to its common carrier activities, rather than “status based,” such that an entity engaged in common-carrier activities is entirely exempt from FTC jurisdiction.

Areas of Law: Federal Civil Procedure, Anti-Trust and Trade Regulation

Issues Presented: Whether the FTC Act’s common-carrier exemption from the agency’s enforcement authority over “unfair or deceptive acts or practices” is “activity based,” meaning that a common carrier is exempt from FTC jurisdiction solely with respect to its common-carrier activities, or status-based, such that an entity engaged in common-carrier activities is entirely exempt from FTC jurisdiction.

Brief Summary: The Ninth Circuit, sitting en banc, affirmed the district court’s denial of AT&T Mobility, LLC.’s (AT&T) motion to dismiss the FTC’s action alleging that AT&T’s data-throttling program was unfair and deceptive. The en banc court rejected AT&T’s argument that it was exempt from FTC regulation because it is a “common carrier[] subject to the Acts to regulate commerce.” 15 U.S.C. § 45(a)(2). AT&T argued unsuccessfully that its non-common carrier – mobile data service – activity was exempted from FTC regulation regardless of the fact that it provides both common-carrier and non-common-carrier services because it has the “status” of a common carrier based on its telephone service.

Further, the Ninth Circuit en banc court also held that a Federal Communication Commission’s (FCC) order, issued after the FTC filed suit against AT&T, that reclassified mobile data service from a non-common-carrier service to a common carrier service, applied prospectively and, therefore, did not deprive the FTC of its jurisdiction or authority over conduct occurring before the order.

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