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News, Telecommunications - Written by Renai LeMay on Friday, January 18, 2013 11:56 - 25 Comments
Never gonna give you up:
ACCC takes TPG to High Court
news The Australian Competition and Consumer Commission this morning flagged plans to appeal a bruising legal loss against TPG, with the regulator continuing to push its case that TPG’s ‘unlimited’ ADSL and telephone bundle advertisements were misleading.
The long-running case was first filed by the Australian Competition and Consumer Commission (ACCC) in December 2010, with the regulator claiming TPG’s $29.95 ‘Unlimited’ ADSL2+ plan actually cost a great deal more. TPG subsequently dumped the plan, replacing it with a $69.99 offering. In November 2011, Justice Bernard Murphy found advertisements for the plan misleading and eventually settled on a $2 million fine allocated to TPG in the case.
When the case was kicked off, TPG made the following statement: “TPG is disappointed with the ACCC’s decision to bring proceedings against it in relation to our award winning $29.99 Unlimited broadband plan which is available when bundled with line rental at $30 per month. This plan continues TPG’s value leading services and has been very well supported by customers across the country. TPG believes that our advertising clearly and properly represents the costs involved and we will be defending the proceedings.”
However, late last year, the full Federal Court allowed TPG’s appeal in the case, ruling that Justice Murphy erred in applying the legal test of whether the advertisements misrepresented the offer and also erred by not giving appropriate consideration of consumers’ knowledge relating to bundling practices and set up charges.
The court did uphold Murphy’s decision relating to TPG’s first initial TV advertisments of the plan, and did uphold some findings regarding website and newspaper advertisements. That section of the Trade Practices Act relates to the way pricing is advertised. However, in the full judgement in late December, available online here, the Federal Court made it clear that revised TPG television, and initial and revised radio, print, public transport and online advertisements published by TPG of the $29.99 plans were not misleading.
This morning, the ACCC issued a brief statement noting that despite its almost comprehensive loss in the Federal Court late last year, it planned to continue attempting to hold TPG to account in the case. “The ACCC is seeking special leave to appeal to the High Court in relation to the Full Court’s findings on both liability and penalty,” the regulator said. TPG has not issued a statement in response.
Frankly, I consider this to be a poor move on the ACCC’s part. I’ve consistently stated, and I think most people agree with me at this point, that the ACCC is pushing way too hard with this one — in fact, the regulator is basically attempting to push a weak case uphill.
If you read the various judgments which have been handed down so far in this case, you will speedily come to the conclusion that it is the most recent judgment handed down by the full Federal Court in late 2012 that is the far more nuanced and comprehensive one. As in many Federal Court actions, the single judge who initially examined this case didn’t go into as much detail and nuance as would be ideal. The more recent judgement correctly rectified this situation, in my opinion, and clearly identified where TPG had stepped slightly over the bounds of propriety with its advertisements and where it had not. It made a great deal of sense to me.
The result was that the ACCC got its nose bloodied last year. Now, with its decision to appeal the case to the High Court, the ACCC is likely to make its own situation even worse. I believe it extremely unlikely that the High Court would overturn the very sensible judgement of the full Federal Court.
To be honest, we’ve seen quite a few of these moves from the ACCC in recent times when it comes to legal action. I’m not sure yet whether or not its court case against HP for misleading consumers about warranties is justified, but I didn’t approve of the way the regular rubber-stamped the uncompetitive $800 million deal Optus has signed with NBN Co, and I also didn’t approve of the way the regulator targeted Apple over the use of ’4G’ in the iPad line it released in mid-2012, given that there is very little evidence any consumers were injured by the move, and the fine imposed by the court was tiny by Apple’s standards. Plus, Apple had already offered to reimburse any consumers who had felt unsatisfied with its products.
Although it won its case against Google in April last year over misleading advertisements on the company’s search results pages, again, there was little evidence of any real widespread problems spurring from Google’s setup, and again all the court case resulted in was a “consumer law compliance program” being put in place at Google. Was the lawsuit really worth it?
I am sure there are those out there who will violently disagree with what I am saying here: People who are inherently suspicious of Big Corporations and want to see the Government holding them to account. Hell, I’m normally one of those people! However, in all of these cases (with the possible exception of HP), the ACCC appears to have targeted technology-related organisations with an extremely heavy fist, when it’s highly debatable whether those organisations actually did anything that wrong in the first place. Sure, they stepped over the line slightly … but have these cases been worth taking to court? Isn’t there a better option?
And when there have been clear examples of anti-competitive behaviour, such as the $800 million payday Optus is receiving from NBN Co, the ACCC has been hesitant to act; an approach we’re seeing play out again in Telstra’s anti-competitive acquisition of Adam Internet, where the ACCC is taking a softly, softly, cautious approach, despite clear industry ire on the issue from Telstra’s competitors and the lack of any obvious outcome for consumers from the acquisition.
Maybe it’s just me. But I’d like to see a smarter approach from the ACCC when it comes to dealing with the technology sector. Its recent legal actions just seem a little bit … off, to me. It feels like maybe the regulator doesn’t quite understand all the issues.
Image credit: TPG
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