Australia’s competition watchdog threatened legal action against operators if they fail to ensure their advertising is clear and transparent, in an ongoing battle over the promotion of unlimited tariffs.
Rod Sims, chair of the Australian Competition and Consumer Commission (ACCC), warned operators they will face much higher penalties and that executives may be taken to court if they knowingly approve misleading advertisements.
“Telecommunications companies should be wary of using absolute claims like unlimited where that does not give a true picture to consumers of what is being offered.”
The ACCC has taken a range of actions against operators for misleading consumers, he said, adding: “It’s about time they showed more respect for their customers and Australian consumer law”.
Penalties for breaching of the country’s consumer law increased on 1 September to the greater amount of either AUD10 million ($7.2 million), three-times the value of the benefit received or, if the benefit cannot be calculated, 10 per cent of turnover in the preceding 12 months. Penalties against individuals increased from AUD220,000 to AUD500,000 per breach.
Earlier this year the ACCC began investigating Optus, Vodafone Australia and Telstra’s use of the term unlimited as Optus filed a case seeking compensation from Telstra after a federal court ruled an advertising campaign by the latter may have misled consumers and ordered it to halt the promotion.
The ACCC said that between March and June, Optus, Vodafone and Telstra advertised unlimited mobile data plans despite the fact they imposed speed caps based on specific use cases or data thresholds, among other limitations.
Most of the adverts featured disclaimers which were not sufficiently prominent or clear to explain to consumers the existence and impacts of the limitations, the ACCC said.
After the Federal Court’s findings, all three operators stopped using the headline claim of unlimited to advertise their mobile data services.Subscribe to our daily newsletter Back