Optus hit with $3.61 million fine
THE Full Federal Court ordered Optus to pay $3.61 million in civil penalties in relation to advertising for the 'THINK BIGGER' and 'SUPERSONIC' broadband internet plans.
Optus launched their 'THINK BIGGER' data plan campaign in April 2010, but, according to the ACCC, failed to warn customers of conditions where they wouldn't get what they paid for.
For a monthly payment, a consumer would receive a headline data allowance of broadband which was then split into peak (midday to midnight) and off-peak (midnight to midday) data allowances.
The ACCC alleged that Optus had not sufficiently disclosed that the service would be speed limited to 64kbps at all times once a consumer exceeded their peak data allowance.
The consequence was that any unused off-peak data would no longer be available at a broadband speed and that a consumer, in certain circumstances, would not be able to use the total headline allowance once the speed had been throttled back.
The case was heard as an appeal to a previous judgment fining Optus $5.26 million for breaching the Trade Practices Act 1974.
The court found that "Optus cannot be regarded as a first offender. It failed to observe the requirements of the Act, and not for the first time", and "this court should proceed on the footing that Optus' conduct was very serious. The contraventions were on a grand scale. They were also unexplained".
"One thing is clear from this judgment, the court considers Optus' conduct to be completely unacceptable," ACCC chairman Rod Sims said.
"As the Full Federal Court stated, there is no explanation for the contraventions."
The Full Federal Court rejected arguments by Optus that it was excessive for the primary judge to impose a penalty which amounted to "profit stripping".
Rather, the Full Federal Court said a penalty which did not substantially affect the profitability of Optus' campaign could not be countenanced.
The court added that "generally speaking, those engaged in trade and commerce must be deterred from the cynical calculation involved in weighing up the risk of penalty against the profits to be made from contravention".
Mr Sims said the court's comments send a very strong message to businesses.
"The clear message from the Full Federal Court is that penalties must be set at a sufficiently high level so as to deter misleading conduct becoming a legitimate business strategy," Mr Sims said.