This is not the first time the three operators have breached national consumer law. Their customers have already been contacted about refunds
Telcos ordered to pay a combined total of A$33.5m (£19.1m): Australia’s three largest ISPs – Telstra, Optus and TPG – have been fined for making false or misleading representations to consumers when promoting 50Mbps or 100Mbps fibre-to-the-node (FTTN) tariffs offered via the National Broadband Network (NBN). Telstra has been ordered to pay A$15m (£8.5m), while Optus and TPG must pay A$13.5m (£7.7m) and A$5m (£2.9m), respectively. According to the Australian Competition and Consumer Commission (ACCC), the operators committed to advising customers within a reasonable timeframe if the speeds they were paying for could not be reached on their NBN-based connections, and to allow them to move to a cheaper tariff with a refund if they could not. However, Telstra, Optus and TPG each admitted that such statements were false or misleading, and in breach of consumer law because they did not have adequate systems, processes and policies in place to keep their promises.
This is not the first time the operators have misled their customers: Consumers should have accurate information on broadband plans to enable them to choose the tariff that best meets their needs. Under Australian consumer law, it is illegal for businesses to misrepresent the performance characteristics, nature, standard or quality of their products and services. The significant penalties therefore reflect the seriousness of the infringements, which are not the telcos’ first offence. In late 2017, Telstra, Optus and TPG provided court-enforceable undertakings to the ACCC to provide remedies to consumers after they had promoted NBN plans with specific maximum speeds which could not be obtained. The undertakings also required them to check the maximum speeds and inform consumers if this did not meet the speed in their plan. In addition, the ACCC has previously taken legal action against Telstra for its third-party billing practices and against Optus for multiple false and misleading statements.
European regulators have stepped in to ban misleading adverts: With nearly 120,000 consumers affected by the misleading statements, Telstra, Optus, and TPG have each implemented remediation programmes and have contacted impacted customers to provide refunds. In many countries, the advertising of telecoms services has become a key issue on regulators’ consumer protection agendas. Iliad Italia was fined €1.2m (£1.1m) for misleading 5G marketing – a penalty that followed an order to change how it was promoting its new fibre service. Vodafone Ireland has also faced criticism over its ‘unlimited’ 5G plans after it cut off some customers who were using “excessive” data. As such, some regulators have intervened to address instances of false or deceptive advertising, including introducing guidelines to improve transparency around fair use policies, which can be particularly problematic in mobile. Germany has arguably gone a step further, allowing consumers to lower the contractually-agreed price for broadband or to terminate their contract without notice in the event of poor service. However, strict measurement requirements are currently blunting BNetzA’s so-called ‘right of reduction’ rules.
