Optus wins $1.65m ad fine cut

Summary:The full bench of the Federal Court has cut Optus' fine for misleading broadband ads aired in 2010 from $5.26 million to $3.61 million.

The full bench of the Federal Court has cut Optus' fine for misleading broadband ads aired in 2010 from $5.26 million to $3.61 million.

New look site

The Moose's antlers were misleading
(Screenshot by Josh Taylor/ZDNet Australia)

Last year, Optus copped a landmark $5.26 million fine from the Federal Court over a series of TV, radio, print, online and billboard advertisements for "Supersonic" and "Think Bigger" fixed-line broadband plans advertised between April and September in 2010.

Federal Court Judge Nye Perram found that the advertising was deceptive because the telco hadn't made it clear that users would have their speed reduced to 64 kilobits per second once they had exceeded their monthly peak or off-peak allowances. The Australian Competition and Consumer Commission (ACCC), which brought the case against Optus, had inferred that the telco failed to disclose that once a user had surpassed their off-peak quota, their peak quota would be deducted for any downloads thereafter.

The court accepted Optus' argument in the appeal that there was no way to measure the impact the misleading advertising had on consumer purchases, but despite the fine reduction, the full bench of the Federal Court found that there was "no satisfactory explanation" for why Optus breached advertising conventions for the ads.

The full bench of the court rejected Optus' suggestions that the original judge was seeking to strip the telco's profits in handing down such a large penalty.

"The court must fashion a penalty which makes it clear to Optus, and to the market, that the cost of courting a risk of contravention of the Act cannot be regarded as acceptable cost of doing business."

However, the court took a more lenient approach to online advertising.

"A consumer minded to enter into a plan online would soon appreciate the qualification of Optus' headline promise in relation to broadband speed."

Optus told ZDNet Australia in a statement that it was satisfied with the court's decision.

"We appealed the decision because we felt misstatements had been made regarding Optus employees and our approach to compliance," Optus said. "We are pleased the court recognised that some of the court's original conclusions were not appropriate."

Optus still incurs 11 fines for each advertisement, but this has been reduced as follows:

  • Think Bigger 120GB plan TV ad with the moose: $750,000 reduced to $600,000
  • Think Bigger 150GB plan TV ad with the moose: $750,000 reduced to $600,000
  • Think Bigger 120GB plan TV ad with the ostrich: $750,000 reduced to $600,000
  • Think Bigger 150GB plan print ad: $450,000 reduced to $300,000
  • Think Bigger 120GB plan flyer ad: $450,000 reduced to $300,000
  • Think Bigger 150GB plan flyer ad: $450,000 reduced to $300,000
  • Think Bigger 150GB plan billboard ad: no change to $10,000 fine
  • Think Bigger 120GB plan online ad: $600,000 reduced to $300,000
  • Supersonic 120GB plan online ad: $350,000 reduced to $200,000
  • Supersonic 150GB plan online ad: $350,000 reduced to $200,000
  • Supersonic 170GB plan online ad: $350,000 reduced to $200,000.

Topics: Telcos, Government, Government : AU, Optus

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.