news The Federal Court has reportedly ruled that TPG’s prominent nationwide advertising campaign for $29.95 “unlimited” broadband plans was misleading because it didn’t properly disclose additional line rental costs and setup fees.
The case was filed by the Australian Competition and Consumer Commission (ACCC) in December last year, with the regulator claiming TPG’s $29.95 ‘Unlimited’ ADSL2+ plan actually cost a great deal more. The plan typically comes with a further $30 worth of compulsory line rental charges, plus $129.95 worth of setup fees.
“The ACCC alleges that TPG’s advertisements for its $29.99 unlimited ADSL2+ broadband plan are false and misleading because the advertisements represent to consumers that they can buy unlimited ADSL2+ broadband services for $29.99 per month,” the regulator said in a statement at the time. “In fact these services are only available when purchased together with home phone line rental from TPG at an additional cost of $30 per month, meaning that the minimum monthly charge payable is $59.99 not $29.99.”
In addition, the regulator stated, TPG’s advertisements did not adequately disclose two other up-front charges — a $129.95 broadband setup fee and a $20 home phone deposit. The regulator sought a declaration that the ISP contravened the Trade Practices Act, and wanted it to pay pecuniary penalties, corrective advertising and costs.
The Commonwealth Courts site notes that the case was scheduled to hear a judgement last week, and the Herald Sun newspaper has reported that the finding was in favour of the ACCC. “The ordinary or reasonable consumer taking in only the dominant message would have the impression the entire cost of the service is $29.99 per month, with no other charges and no obligation to acquire another service,” Justice Bernard Murphy said, according to the newspaper.
Neither TPG nor the ACCC has yet issued a statement on the matter.
Last week’s victory wasn’t comprehensive for the ACCC, however. The regulator had applied to the court to freeze the TPG ads until the case was finalised. However, the application was unsuccessful, and so TPG has been able to market the unlimited plan over the past year.
This was a case which could have gone either way. Yes, Justice Murphy is right — the ordinary broadband consumer could have been taken in by TPG’s advertising. TPG truly blanketed Australia with those ads, and while the extra costs were disclosed, it’s safe to say the font size in which the extra costs were displayed was often quite a bit smaller than the headline $29.99 price.
However, as I wrote last year, the costs were definitely disclosed — both in the ads, and in associated contracts which TPG customers would have had to sign. They would have been pretty hard to miss, and the vastly overwhelming majority of consumers in the now-mature broadband market would have noticed them.
Did I personally like TPG’s ads? No; I thought they were a blight upon the media landscape, and insulting to informed consumers. However, at no point did I feel I had been taken in by them, and I feel the Federal Court’s decision is a little heavy-handed; even potentially impinging unfairly on TPG.
I don’t know how possible this is legally, but I would have liked to see the Federal Court hand down a judgement which was more granular; perhaps cautioning TPG to be more careful in future and keeping it on probation a little, but also acknowledging that the ACCC could have picked a better target. This was truly a court case which wasn’t easy to pick.