Optus has been served with a three-year injunction preventing it from conducting similar advertising campaigns to its "Supersonic" and "Think Bigger" broadband ads.
The Federal Court ruled earlier this week that Optus had misled customers in its "Superfast" and "Think Bigger" advertising broadband campaigns by not clearly indicating that once a user went over their peak or off-peak download limits, their access would be throttled to 64 kilobits per second. By not doing this, the company had breached the Trade Practices Act, according to the ruling.
As a result, Justice Nye Perram yesterday placed an injunction on Optus, preventing the telco from engaging in similar advertising campaigns for a period of three years. He also ordered Optus to pay all of the Australian Competition and Consumer Commission's (ACCC's) court costs.
The ruling was welcomed by ACCC chair Graeme Samuel.
"This judgment reinforces the ACCC's long held position that this approach is not acceptable commercial practice and does not reflect what the law requires," Samuel said in a statement yesterday. "Companies cannot rely on their call centres to correct advertisements that have misled and deceived people.
"Consumers were told in these ads that they were going to get a certain amount of broadband, and it's only after you work through confusing and vague disclaimers that you realise that it's just not the case. Consumers and the ACCC are, frankly, tired of telcos using complex, confusing and deceptive advertising to fool consumers. This should serve as yet another reminder, that if these companies don't clean up their act, the ACCC will be here to take you to task and you can expect to be hit with the full force of the law."
For its part, Optus argued in the course of the trial that the advertisements were not in breach of the law because customers didn't make purchasing decisions on the basis of advertisements alone, and would have been informed of the limits of the plans either via the Optus website or by Optus' sales staff.
A decision on what corrective advertising and what monetary penalties might apply to Optus is expected to be made at a later date.
Updated at 1:01pm, 8 December 2010: we incorrectly reported that the court issues were with Optus' Superfast plans. It was actually the carrier's Supersonic plans.