Not providing all the detail on the limitations of Optus' "Supersonic Broadband" plan in the advertisements didn't matter because customers research their broadband plan options before making purchasing decisions, Optus' lawyers told the Federal Court today.
The hearing of the case alleging misleading or deceptive conduct by Singtel Optus brought by the Australian Competition and Consumer Commission (ACCC) got underway in the Federal Court in Sydney this morning.
The case covers a total of 11 advertisements that were part of two Optus campaigns run on television, in print, on billboards, online and in flyers distributed to households. The "Think Bigger Superfast" campaign began on 25 April 2010, and the "Supersonic Broadband" campaign began on 2 August. Both campaigns' television components ended on 9 September but continued online.
The ACCC alleges that Optus did not sufficiently or clearly disclose that the plans, marketed as "unlimited", would in fact be throttled to 64 kilobits per second (Kbps) once customers exceeded the monthly peak or off-peak data allowances. In some cases Optus did not disclose these qualifications at all, it alleges.
One print advertisement, for example, did not specify the speed to which the service would be limited, that the speed would be limited during off-peak times even when only on-peak data was exceeded, or that the limited speed was "sub-broadband".
"While there is some variation as to what broadband is," said ACCC barrister Neil Williams SC, "the material [of one expert witness' affidavit] shows clearly that 64K[bps] is not merely below broadband but on any view well below broadband." One generally-accepted definition of broadband is that it's "at least 256Kbps".
Optus is arguing that the question of whether or not an advertisement is misleading or deceptive needs to take into account the context of other information available, including what customers are told in-store, or by telephone sales staff, or by door-to-door salespeople.
"Isn't it a question of whether it's misleading at the time of the advertisement?" asked the judge in the case, Justice Nye Perram.
Optus tendered traffic reports that showed the "choose a plan" page of its website had been visited 469,000 times. "The website is a well-used resource by consumers, and this is supported by market research," said Optus barrister Matthew Darke.
Optus said its market research shows that "most consumers feel they spend a lot of time researching purchasing decisions". However, Justice Perram pointed out that what people feel they are doing does not necessarily equate to what they are actually doing.
"Even if people do spend a lot of time," proffered Williams, "how they feel is not of assistance."
"Just remind me how a survey gets into evidence anyway?" asked Justice Perram. "That it was created in contemplation of litigation?"
Optus said the report was part of the company's normal customer research. It has provisionally been allowed into evidence, as have Optus' website traffic reports.
The ACCC contended that there is a class of consumers who may or may not seek further information, and that there is no correlation between those who viewed the advertisement and those tallied in the web traffic reports.
"It would include all sorts of people, those beside me for example," Williams said, referring to Optus' legal team. "It may have been Optus employees."
The court discussed a hypothetical example where a website selling a product had a misleading first page, but to buy the product users needed to click through to a second page that displayed further information as an "antidote" to being mislead.
Williams agreed that "the consumer can't be misled in an operative sense in entering into the agreement because they could not have entered into the agreement without going from the first page to the second page."
"Does the boundary of context extend forward in time?" asked Justice Perram.
The hearing continues this afternoon, and is expected to end today. Questions of penalties and corrective advertising will not be discussed until Justice Perram has decided the question of misleading or deceptive conduct.