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.
opinion/analysis
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.
Image credit: Jason Morrison, royalty free
I definitely agree with your analysis. While it was certainly a smaller font, it was always definitely included in the ads. The radio ads were the same, “$29.95 when you bundle with a home phone for $30 a month.”
The ads themselves were bland and unexciting, but they weren’t misleading, IMO.
I agree with the Federal Court, the Ads were misleading.
I think it’s a silly ruling given broadband has _ALWAYS_ been advertised by this.
This quote especially is annoying:
“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
But they ARE getting the unlimited ADSL2+ for $29, you just need to bundle this with phone, it’s the phone that costs the extra $30.
To me. I don’t see TPG doing anything different to any other company.
“I think it’s a silly ruling given broadband has _ALWAYS_ been advertised by this.”
Silly or not, it’s a bad practice. Bundling is fine, but it should be clearly defined. Unreadable text at the bottom of an Advertisement isn’t an automatic get out of jail card.
The TPA exists not just for smart folk. If you look at that kind of advertising from a layperson’s view, the lack of understanding around ‘bundling’ and ‘unlimited’ is ripe for abuse. The ACCC is well aware of this and should jolly well help stamp it out.
I wouldn’t say it’s “unreadable”. Here’s an example of one of their ads: http://static.shimatech.com.au/files/images/news/tpg-unlimited-adsl2.jpg
Certainly, the “when bundled” line is a smaller font, but anybody who’s mislead by that ad into thinking $29.95 is the only charge is not what I’d call “average” (which is usually the test for these kinds of things, right?)
A very interesting outcome here, not just for TPG but many ISP’s and any other industries that advertise to the public.
If the original report is correct, it’s certainly a slow burner of a news article, as the original was by the Daily Court reporter and published only in the Business section. Delim is the only other ‘Tech’ place to cover it at all, so far.
A major point that has not yet been covered is the details of the EXACT published advertisment and not the current one (as linked above). The current one seems to be OK with anyone who bothers to read the requirements. Too many remarks are stating this current ad has ‘too many asterisks’ or ‘is too small’ or ‘hidden in the fine print’, when infact the issue seems to be with a much older, short lived version. Surely if the current one is the one under investigation, then TPG would have changed the media-saturation version seen even today, all over the TV, Newspapers and every form of public transport you can whack an ad on (at great cost).
Hey, even over the weekend TPG has ADDED to this ‘On-Net Home-Phone’ offering with increased ‘Bundled’ features, so there must have been another version that was released earlier as the centre point of this case.
Many might not like anything TPG does and will blindly attack without thinking that their own ISP does almost the same thing. How many ISP’s price their plans and dont include the fact a copper phone line MUST be included and there are associated (sometimes 3rd party) costs for that? Even Naked has a ‘hidden’ copper requirement.
The ACCC seem almighty here but has ANY customer actually been misled? (if they had tried to sign up, the ‘not so fine print’ is pretty bold as to the requirements, well before any details/ccard/first child are taken by them). Did anyone really ‘complain’, or are the ACCC doing this to protect those too stoopid to read their contracts?
Where’s the ACCC press release? Where’s the court papers? Where’s the detail? Where’s the Ad in question? So far it’s 1 Court reporter commenting on Business issues. Perhaps once we have the facts we can comment properly on it, and not just as inflamed fanboi hot-heads
D
Update: The ACCC has issued a statement on the issue:
http://www.accc.gov.au/content/index.phtml/itemId/1016182
hey MitH: I’ve been trying to get those documents you’ve requested. No luck yet, but I’ll keep trying.
I think this story would have been covered much more widely by the other technology publications if the ACCC had issued a media release last week … a lot of the other sites tend to be media release-driven ;)
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