Last week, Optus Internet Pty Limited paid $51,000 in penalties in connection with its advertising for cable broadband. In Australia, consumers receive a broad range of protections by the Australian Consumer Law (ACL). The Australian Competition and Consumer Commissioner (ACCC) is the national regulatory body responsible for enforcing the ACL.

The internet over the years has become an increasingly important part of consumers’ lives, and there has been growing competition between providers for the supply of Internet services and plans. Alongside these developments, the ACCC has kept watch on the advertising and selling practices of internet providers, to make sure they don’t infringe consumer protections. The recent penalties against Optus are the latest in a line of stings by the ACCC in this industry.

Misrepresentations About Data Speeds

One of the key provisions of the ACL is the broad prohibition against misleading conduct. For more background, see our other article outlining what you need to know about misleading conduct. Alongside the general prohibition against misleading conduct, section 29 of the ACL prohibits a range of false or misleading representations about goods or services, including representations about the quality or standard of goods or services.

Between January and August 2015, Optus used the expression “NBN-like speeds” in its advertising materials to describe the data transfer rates of its broadband service and specific broadband plans. In the ACCC’s view, this term misrepresented that Optus’ speeds were comparable to speeds available on the NBN. In fact, Optus’ speeds were not as fast.

ACCC Enforcement

The ACCC has a wide range of tools at its disposal to promote compliance with the ACL. In this case, the ACCC used two enforcement mechanisms – it issued infringement notices and accepted court enforceable undertakings.

Infringement Notices

The Australian Consumer Law is contained in Schedule 2 of the Competition and Consumer Act 2010 (CCA). Under section 134A of the CCA, the ACCC may issue an infringement notice if it believes, on reasonable grounds, that a person has contravened certain provisions of the Australian Consumer Law (including section 29).

Importantly, by paying an infringement notice, a business is not taken to have admitted that it contravened the ACL. However, in its undertakings, Optus accepted that its “NBN-like speeds” advertising may have contravened the law.

Undertakings

Under section 218 of the ACL, the ACCC may accept undertakings in relation to the conduct of a business and the court may make certain orders if the business breaches the undertakings.

In the undertakings given by Optus to the ACCC, Optus committed to the following obligations:

  • Not to use the expression “NBN-like speeds” in its advertising materials unless the speeds it is advertising are equivalent to speeds available on the NBN;
  • To allow customers who signed up during the period of the advertising to cancel their contract without cost and seek a refund for any upfront fees; and
  • To arrange for an independent review of its trade practices compliance program and implement any recommendations.

In its press release, the ACCC reminded businesses that all comparative advertising must be accurate and businesses should be able to substantiate claims they make about the quality of their products compared to those of competitors. The ACCC also noted that it would continue to monitor claims about internet performance and take action against businesses where necessary.

Questions? Get in touch with LegalVision’s consumer lawyers on 1300 544 755.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Thomas Kaldor

Get a Free Quote Now

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • We will be in touch shortly with a quote. By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.

Our Awards

  •  Top 20 Startups in Australia - 2018 LinkedIn Startups List Top 20 Startups in Australia - 2018 LinkedIn Startups List
  • NewLaw Firm of the Year – 2019 Australian Law Awards NewLaw Firm of the Year – 2019 Australian Law Awards
  • Law Firm of the Year Finalist – 2018 Australasian Law Awards Law Firm of the Year Finalist – 2018 Australasian Law Awards
  • AFR Fast 100 List – 2018 Australian Financial Review AFR Fast 100 List – 2018 Australian Financial Review
  • NewLaw Firm of the Year – 2017 Australian Law Awards NewLaw Firm of the Year – 2017 Australian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer Most Innovative Law Firm - 2019 Australasian Lawyer

Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy