Google and other technology companies could potentially sidestep U.S. enforcement of consumer-protection laws if a federal appeals court ruling siding with AT&T Inc. isn't reversed, the Federal Trade Commission is warning.
The FTC, in court papers filed last week, argued that an August appeals court decision risks eroding its mission of protecting consumers from unfair and deceptive practices. That's because the ruling eliminated the FTC's jurisdiction over phone carriers and Internet service providers. That could open the door for technology companies that also offer phone or broadband service to avoid the FTC's reach in consumer protection cases.
"The panel's ruling creates an enforcement gap that would leave no federal agency able to protect millions of consumers across the country from unfair or deceptive practices or obtain redress on their behalf," the FTC said.
The appeals court ruled that all activities of so-called common carriers fall under the supervision of the Federal Communications Commission. The FTC's view is that it has broader powers than the FCC to carry out consumer protection enforcement in this area, including the authority to obtain money back for consumers.
The agency is worried about the wider implications of the ruling, which could provide a road map for companies to avoid FTC enforcement regardless of the conduct at issue, the commission said. Companies that aren't common carriers today could gain that status by offering new service or through corporate acquisitions, it said, citing Verizon Communication's pending purchase of Yahoo Inc.'s core Internet business.
The FTC is returning to court in a matter that started when it sued AT&T in 2014 over mobile-data speeds. The FTC accused the carrier of intentionally slowing data speeds of millions of phone customers who had paid for unlimited data plans. Once those customers hit an arbitrary data-use ceiling imposed by the phone company, according to the FTC, AT&T slowed speeds so that Web browsing and watching video became difficult or impossible.
AT&T countered that the FTC can't sue it because only the FCC has jurisdiction over phone companies under an exemption for common carriers. A three-judge panel of the San Francisco appeals court agreed and ordered the case dismissed in August. The FTC is now asking the full appeals court to rehear its arguments.
"We believe the appeals court's ruling was correct, and that any reviews would agree," AT&T spokesman Michael Balmoris said in an e-mail.
Google didn't respond to a request for comment about the FTC's appeal.