Florida’s attorney general has spanked AT&T, the largest U.S. wireless carrier, with $3 million in fines for pushing “free” ringtones that carry expensive, hidden subscription fees. AT&T (T) will also have to pay out millions of dollars in refunds to its subscribers — the Tampa Tribune pegs the range from $10 million to $45 million.
That’s a lot for one carrier in one state, and the Florida government is now launching investigations of Verizon Wireless, a joint venture of Verizon (VZ) and Vodafone (VOD), Sprint Nextel (S), T-Mobile, and Alltel. The good news: The carriers and ringtone companies have known this was coming for a while. The downside: Sleazy ringtone marketing, and government steps to curb it, have already helped slow down the ringtone craze in Europe. And now it threatens the U.S. industry, which isn’t projected to grow much in the next few years.