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Broadband misrepresentation down to the consumer
- — 27 October, 2010 12:04
Whether or not potential Optus customers were misled by recent advertising of its “Think Bigger” and “Supersonic” advertising campaigns resides on the type of consumer involved, a Federal Court has heard.
The Australian Competition and Consumer Commission (ACCC) this week continued its courtroom battle with the telco over advertising for its recently upgraded DOCSIS 3.0 cable plans.
The legal proceedings — first brought against Optus in September — questions a total of 11 ads across online, print, television and billboards which advertised the product was four times faster than “standard broadband”. The network is capable of downstream speeds of up to 100 megabits per second (Mbps) downstream, but this is capped to 64 kilobits per second (Kbps) once the user reaches their monthly download quota.
Legal council for the ACCC argued that, while ther term 'broadband' could be construed as different bandwidth speeds, the evidence “clearly shows 64Kbps is not below broadband but well below broadband”. The industry watchdog contended broadband had to provide speeds of at least 256Kbps, a definition currently held by the Australian Bureau of Statistics (ABS).
The ACCC also noted that, while print advertising for the plans in question note speed throttling, they do not mention the speed to which customers are throttled.
The watchdog and telco also came to heads over whether a consumer could be misled by advertising alone, or whether contextual evidence from Optus’ website and other sales channels could provide “antidote-style evidence” to any possibly misleading offers or misrepresentation.
Legal counsel for Optus contended that consumers would use multiple sources of information when considering any broadband plan.
“Consumers don’t purchase broadband services on impulse but rather purchase them after careful research,” barrister Matthew Darke argued.
In defence of its case, Optus submitted statistical evidence of website traffic, revealing the “Think Bigger” campaign website received more than 101,000 individual hits over the course of the campaign, while the “Supersonic” website’s ‘choose a plan” received in excess of 63,000 visits. Presiding judge, Justice Nye Perram, agreed to provisionally keep other website statistics confidential for fear of its use as commercially sensitive information by Optus competitors.
However, the ACCC rubbished the numbers as aggregate and provided little information as to how long visitors spent on the page.
The class of consumer in question, the watchdog argued, remained undefined.
“[Consumers] may or may not go into a shop, they may or may not ring up,” ACCC barrister, Neil Williams SC, said. “There’s no correlation between the people that look into the website and those that go into the shop.
“There might be half a million people going to the website and half a million people going into the shop, but they might be a different half a million people.”
However, Justice Perram said that, provided the correct information was provided in the same context to undo any possibly misleading information, misrepresentation may not have taken place. Legal counsel for the watchdog agreed but contended no such evidence was provided to show that was the case.
The latest case is the second such between the telco and watchdog in recent times, with the ACCC taking Optus to court in June over alleged misleading use of the word “unlimited” on mobile, landline and internet plans.
Any penalties resulting from a decision in the current case, including potential corrective advertising or mandatory injunctions, will be decided at a later date.