Completely unacceptable: telco has recieved a pricey slap on the wrists for dodgy broadband ads.
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The incriminating ads relating to its 2010 ‘Think Bigger’ and ‘Supersonic’ broadband plans have now cost Optus $3.61 million in fines which Federal Court have ordered it to pay last week.
Paul O Sullivan’s telco did manage to cut $1.6m off the original fine bill, which had totalled $5.26 on appeal, however, as ordered by Justice Perram for breaches of the Trade Practices Act 1974.
Optus argued the fine amounted to “profit stripping,” which the Federal Judges rejected.
The Court did allow the appeal and set aside the penalties originally ordered on the basis that the primary judge erred in making certain factual findings, the ACCC confirmed Friday.
The Court “resoundingly supported the initial findings in relation to the seriousness of the conduct and the need for a substantial penalty,” particualrly since its not the first time Optus has been found in breach of consumer law, it said.
‘Think Bigger’ and ‘Supersonic’ ads launched in 2010 featured on television, newspapers, billboards and claimed for a monthly payment, consumers would receive a data allowance split into peak and off-peak.
However, Optus failed to mention the service would be speed limited to 64kbps once a consumer exceeded their peak data allowance.
The consequence was any unused off-peak data would no longer be available at a broadband speed and consumers, in certain circumstances, would be unable to use the total headline allowance once the speed had been throttled back.
“Optus cannot be regarded as a first offender. It failed to observe the requirements of the Act, and not for the first time”, the Court noted in its ruling.
“The contraventions were on a grand scale. They were also unexplained.”
The competition watchdog, ACCC, also branded the ads “completely unacceptable,” chairman Rod Sims said.
“The clear message from the Full Federal Court is that penalties must be set at a sufficiently high level so as to deter misleading conduct becoming a legitimate business strategy,” he added.
