Dodgy deals: ACCC telco crackdown

Australia's competition regulator has announced it is taking 28 parties, including telcos, to the Federal Court for exclusive dealing and misleading conduct.

The companies, the Australian Competition and Consumer Commission said in a statement today, were Clear Communications, the Axis Telecoms and WorldTel groups and the National Telecoms Group.

There were also some related finance companies and employees of the telcos which have been singled out for allegedly being knowingly concerned in the dealings.

The telcos allegedly used a "bundled services deals" business model to enter into a contract with small businesses to provide them with services.

Although the businesses considered the equipment for the services to be free, covered by the cost of the contract, the equipment was allegedly not free, but instead rented out by finance companies unrelated to the telcos. The ACCC considered this arrangement to be exclusive dealing, which goes against the Trade Practices Act.

The telcos have also been accused of misrepresenting the bundled deals by saying the equipment was free, that the charges for the telco services and bundled services deals would not exceed a specified amount per month, that the only contractual agreement being made by the customer was with the telco, that the price of calls would be lower than that of the customers' existing providers, that the fixed line services will be ported to the telco within a short period of time and that the telco would supply mobile services using the customers' existing numbers.

The ACCC said it was seeking court orders, including fines against some of the respondents, and requirements to publish corrective advertisements as well as to write to each customer who entered into the bundled services deals, advising them of their rights.

The matter will be heard in the Sydney Federal Court on 17 October.