Optus punished for misleading 'unlimited' advertisements of broadband and phone services

Two year injunction from advertising unlimited mobile prepaid and home telephone services

Telecommunications provider Optus has been punished by the ACCC for its 'misleading' advertisement of broadband data allowances. A media release from the ACCC states that Optus had failed to adequately disclose important conditions and limitations of its broadband plans, where consumers' Internet access speeds would be restricted once they had downloaded a certain amount of data.

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Optus' plans did not place a concrete limit upon the amount of data that could be downloaded per month, but Internet access speeds were throttled to 256Kbps after reaching a predetermined monthly allowance. ACCC investigators ruled that this speed, despite being defined as broadband by the Australian Bureau of Statistics in June 2010, was 'practically unusable' for most Internet users' needs including streaming YouTube videos and downloading movies.

Although no punishment has been laid down, Justice North of the Federal Court made a declaration that Optus had contravened section 52 of the Trade Practices Act, which is now known as the Competition and Consumer Act.

In June 2010, Optus ran afoul of the ACCC for including the word 'unlimited' in its print, television and radio advertisements of various pre-paid mobile and home telephone bundles. The ACCC has ruled that, due to the terms and conditions of the bundles and deals offered, the plans were unable to be referred to as 'unlimited'.

The punishment handed down recently by the ACCC includes a restriction on Optus' advertising of its mobile phone and home telephone plans. For the next two years, the telco is unable to refer to any of its services as 'unlimited' if any relevant limitations are included in fine print.

The ACCC's chairman Graeme Samuel said that the ruling should serve as a warning to all Australian telecommunication providers. "[They] should think very carefully before claiming that their service offerings are unlimited. If there are any limitations, then they run the risk that the advertisements are misleading and that they will receive unwanted attention from the ACCC."

In 2009 Optus was fined $110,000 by watchdog ACMA, for failing to adhere to Australian Spam Act regulations when it sent unsolicited SMS messages without adequate sender identification.

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Campbell Simpson

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