Explain Verizon class-action settlement in 500 words
Verizon, one of the largest telecommunications companies in the United States, was involved in a class-action lawsuit that resulted in a settlement in The lawsuit, known as the "Verizon class-action settlement," addressed allegations of deceptive advertising practices related to the company's "unlimited" data plans.
In 2012, the Federal Trade Commission (FTC) filed a complaint against Verizon, accusing the company of engaging in unfair and deceptive practices by throttling the internet speeds of customers with unlimited data plans. The FTC argued that Verizon had promised its customers unlimited data usage but then intentionally slowed down their internet speeds after they reached a certain threshold.
The class-action lawsuit brought against Verizon was a result of this complaint, with customers claiming that they had been misled by the company's advertising and suffered from reduced internet speeds. The lawsuit alleged that Verizon's actions violated the Federal Communications Commission's (FCC) Open Internet Transparency Rule, which requires internet service providers to disclose accurate information about their services.
After years of litigation, Verizon agreed to settle the class-action lawsuit in The settlement included several provisions aimed at compensating affected customers and ensuring greater transparency in Verizon's advertising practices.
Under the terms of the settlement, Verizon agreed to pay a total of $2 million to affected customers. This compensation was divided into two categories: "restitution" and "credits." The "restitution" portion of the settlement involved direct payments to customers who had experienced reduced internet speeds due to Verizon's throttling practices. The amount each customer received depended on various factors, such as the duration of their subscription and the extent of the throttling they experienced.
The "credits" portion of the settlement involved providing affected customers with additional data or service benefits. Verizon agreed to provide a total of $7 million worth of credits, allowing customers to enjoy extra data or other benefits for a specified period. The exact details of these credits were determined based on each customer's individual circumstances.
In addition to the monetary compensation, Verizon also committed to improving its advertising practices and providing clearer information to customers. The company agreed to make significant changes to its disclosures and advertisements, ensuring that customers have a better understanding of the limitations and conditions associated with their data plans. Verizon also agreed to establish a website where customers can access detailed information about its data plans, network performance, and any potential limitations or restrictions.
The settlement also required Verizon to implement a "throttling optimization" tool, allowing customers to manage their data usage and avoid potential speed reductions. This tool would enable customers to make informed decisions about their data consumption and avoid exceeding any thresholds that could trigger throttling.
Overall, the Verizon class-action settlement aimed to address the concerns of customers who felt deceived by the company's advertising practices. By providing compensation, improving transparency, and implementing new tools, Verizon sought to rectify the issues raised in the lawsuit and enhance the overall customer experience.