Optus has been found guilty by the Federal Court of breaching the Trade Practices Act by engaging in misleading and deceptive conduct in its advertising campaigns for its ‘Think Bigger’ and Supersonic’ broadband internet plans.

 

As a result of the finding by Justice Nye Perram, the Australian Competition and Consumer Commission imposed a penalty of $5.26 million for the  breach, the highest civil penalty awarded in Australia for a consumer protection breach.

 

ACCC Chairman Graeme Samuel said the decision sends the clear message that misleading consumers is not a legitimate business strategy.

 

“Optus is not a small business, but a large company that engaged in misleading and tricky conduct.  The entire telecommunications industry needs to sit up and take notice. This conduct is not acceptable, and the ACCC will seek the harshest penalties the law allows.” Mr Samuel said.

 

In advertising its broadband plans, Optus represented that for a monthly payment, a consumer would receive a headline data allowance of broadband which was then split into peak (midday to midnight) and off-peak (midnight to midday) data allowances.'

 

The Australian Competition and Consumer Commission alleged that Optus had not sufficiently disclosed that the service would be speed limited to 64kbps at all times once a consumer exceeded their peak data allowance. The consequence was that any unused off-peak data would no longer be available at a broadband speed.

 

Optus launched the "THINK BIGGER" campaign on 25 April 2010 and the "SUPERSONIC" campaign on 2 August 2010. Optus advertised these plans through a number of media, including television, newspapers, billboards and direct marketing through the yellow envelope.

 

The plans dealt with in these proceedings are:


The “Think Bigger” Internet broadband plans offering:

  • 120GB of data (50GB peak + 70GB off-peak) for $49.99 and
  • 150GB of data (75GB peak + 75GB off-peak) for $59.99, and


The “Supersonic” Internet broadband with Premium Speed Pack plans offering:

  • 120GB of data (50GB peak + 70GB off-peak) for $69.99,
  •  150GB of data (75GB peak + 75GB off-peak) for $79.99, and
  • 170GB of data (85GB peak + 85GB off-peak) for $89.99.

In recent months, the ACCC has successfully taken enforcement actions against a number of telecommunications companies for misleading and deceptive practices in advertising.

 

In February this year, the Federal Court found that advertisements published by Optus that promoted its broadband plans as “unlimited” were misleading and deceptive. Another decision by the Federal Court in June imposed penalties against Global One Mobile Entertainment Ltd and 6G Pty Ltd for false and misleading advertisements regarding mobile premium services.

 

In May this year, the ACCC issued and Optus paid 27 infringement notices totalling $178,200 for alleged misrepresentations concerning its “Max Cap” advertisements for pre-paid mobile phone services. In January this year, Optus provided the ACCC with court enforceable undertakings in relation to alleged misrepresentations to consumers about their statutory rights in relation to faulty mobile phones.