Optus has been forced to pay penalties totalling $51,000 by the Australian Competition and Consumer Commission (ACCC) because of false data transfer rate claims relating to existing broadband Plans.The ACCC stated the infringement notices were issued as “it had reasonable grounds to believe that Optus had made false or misleading representations in relation to the data transfer rates (or ‘speeds’) offered on its existing cable broadband plans”.
Optus used the term “NBN-like speeds” in advertising both its cable broadband service and particular cable broadband plans between January 2015 and August 2015, across websites, billboards and shopping centre posters, catalogues and flyers.
The ACCC stated it was concerned “that Optus’ use of the term ‘NBN-like speeds’ represented that the advertised cable broadband plans provided speeds comparable to the speeds available on the National Broadband Network (NBN) plans, when that was not the case for the plans Optus advertised”.
While the cable broadband plans advertised by Optus offered download/upload speeds of 30/2 Mbps for the advertised price, a wider range of NBN broadband plans offer faster download/upload speeds of 50/20 and 100/40 Mbps.
For an additional price not disclosed in the relevant advertisements, consumers could acquire a faster cable broadband plan offering download/upload speeds of 100/2 Mbps, however the upload speeds are not equivalent to the faster upload speeds available on NBN plans.
“As consumers migrate to the NBN, the ACCC’s action in this matter is a timely reminder to broadband internet providers that they must not misrepresent the performance of the services they are selling,” ACCC chairman Rod Sims commented.
“While businesses may use comparative advertising to promote the superiority of their products over those of competitors, this advertising must be accurate and businesses should be able to substantiate these claims.
“The ACCC reminds broadband internet providers that they must ensure their advertising and product offers to consumers clearly and accurately represent the download and upload speeds they can expect to achieve.”
Sims added that the ACCC will continue closely monitoring the market “for false or misleading claims about internet performance and will not hesitate to take appropriate enforcement action if necessary”.
As part of the court enforceable undertaking provided to the ACCC, Optus has acknowledged that its conduct may have contravened the Australian Consumer Law, agreeing not to use the term ‘NBN-like speeds’ in the promotion of its cable broadband internet service unless that service offers speeds that are comparable to the speeds available on NBN plans.
Optus has also agreed to allow customers who acquired a cable broadband internet service during the advertising period to cancel their contract at no cost, refunding any start-up fee paid to acquire the service, and to arrange for an independent third party to review its trade practices compliance program and implement any changes which are recommended.