news Optus has paid fines of $51,000 for making false claims about its broadband services, saying they were “NBN-like” in their speeds.
Five infringement notices were issued to the telecoms firm by the Australian Competition and Consumer Commission (ACCC). The commission also accepted an enforceable undertaking from Optus – effectively an agreement to correct the situation and ensure it doesn’t occur in the future
The ACCC said it issued the infringement notices because 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”.
Between January 2015 and August 2015, Optus used the term “NBN-like speeds” in advertising both its cable broadband service and particular cable broadband plans, the ACCC said. The claims were made on websites, billboards and other promotional materials.
Optus’ use of the term “NBN-like speeds” represented that the advertised cable broadband plans were comparable to the speeds available on the National Broadband Network (NBN) plans. That was not the case for the plans Optus advertised, according to the ACCC.
The cable broadband plans advertised by Optus only offered download/upload speeds of 30/2 megabits per second (Mbps) for the advertised price. A wider range of broadband plans are available on the NBN, including plans that offer faster download/upload speeds of 50/20 and 100/40 Mbps.
At extra cost, Optus could provide services with download/upload speeds of 100/2 Mbps. However, the upload speeds available on this plan 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,” said ACCC Chairman Rod Sims.
He explained that while businesses may use comparative advertising to promote the “superiority” of their products over those of competitors, they must stick to the facts and 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. The ACCC will continue to closely monitor the market for false or misleading claims about internet performance and will not hesitate to take appropriate enforcement action if necessary,” Sims said.
As part of the court enforceable undertaking provided to the ACCC, Optus acknowledged that it may have contravened the Australian Consumer Law (ACL), and agreed not to use the term “NBN-like speeds” in the promotion of its cable broadband internet service unless that was indeed the case.
It also agreed to allow customers who had acquired a cable broadband internet service during the advertising period to cancel their contract at no cost and refund any start-up fees.
The final element of the agreement was to arrange for an independent third party to review its trade practices compliance program and implement any recommended changes.
The ACCC can issue infringement notices where it has reasonable grounds to believe a person has contravened certain consumer protection provisions of the ACL.
The ACCC said that the payment of an infringement notice is not an admission of a contravention of an ACL, “however in this case Optus has admitted in its undertaking to the ACCC that it may have contravened the ACL”.