Optus appeals $5.26m misleading ad fines
Optus has confirmed that it has lodged an appeal against the $5.26 million fine imposed upon it by the Federal Court for misleading advertising aired last year.
Although it had been suggested that the multimillion-dollar fine would be shrugged off by the nation's number two telco, Optus today confirmed that comments made by CEO Paul O'Sullivan to The Australian that it believed that there were errors made by Justice Nye Perram in his penalty ruling handed down last month.
The Australian Competition and Consumer Commission (ACCC) brought its case against Optus last year for 11 advertisements from its "Think Bigger" and "Supersonic" broadband campaigns run on TV, radio, billboards and online between April and September.
The court found that the advertising for the fixed-line broadband plans 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 ACCC had inferred that Optus failed to disclose that once a user had surpassed their off-peak quota, their peak quota would be deducted for any downloads thereafter.
On handing down such a large penalty, Perram said that he sought to deter other telcos from producing similarly misleading advertising.
"Such a penalty will operate as an appropriate deterrent not only to Optus but also to other traders who might be tempted by the thought that misleading advertising is a profitable strategy. These penalties will demonstrate that it is not," Perram said.
The ACCC said at the time of the ruling that it was the largest civil penalty for a consumer protection matter ever handed down by the court.
Although Optus does not dispute that the ads were misleading, the telco said in a statement today that there were errors in the penalty judgment.
"As an organisation that strives to put the customer first, a court ruling that we've misled our customers was extremely disappointing. Optus acknowledges and accepts the court's decision that the ads were misleading," Optus said. "However, we strongly believe that the penalty decision contains some errors and misstatements about our approach to compliance.
"It is important that Optus has an opportunity to correct those errors through an appeal process."
Last week, Optus announced quarter-one net profits of $161 million, down 5 per cent from $170 million in the same period of 2010.