Court orders against Telstra for misleading Next G claims

The Federal Court yesterday granted the Australian Competition and Consumer Commission declaratory relief and made injunctions permanently restraining Telstra from making any representation to the effect that:

• mobile coverage on the Next G mobile telephone network is always available to Next G customers everywhere the customer, from time to time, needs to use their mobile telephone
• a customer subscribing to the Next G mobile telephone network will receive the same or better coverage than is available currently on the CDMA network,

without disclosing that coverage on the Next G network depends in part on where the person is, what particular handset the person is using and whether that handset has an external antenna attached.

Telstra immediately sought a stay of the injunctions. In refusing Telstra's application for a stay, Justice Gordon stated: "I consider Telstra's conduct was dishonest, the advertising was misleading or deceptive."

ACCC Chairman, Mr Graeme Samuel, welcomed the outcome.

"The orders handed down should prevent Telstra from making false claims about coverage that mislead or deceive consumers while continuing to remind the telecommunications industry of the need for accuracy in the promotion of services."

The orders follow the court's findings that Telstra engaged in misleading or deceptive conduct, falsely represented that services were of a particular standard and represented that goods had performance characteristics, uses or benefits that they did not have.

The illegal conduct included representations that the Next G mobile network had "coverage everywhere you need it" and that Next G customers would get the same or better coverage as they did on the CDMA network. Telstra made these representations in a nationwide advertising campaign that included television, radio, point of sale, online, and print advertisements over a number of months.

The court declined to order corrective advertising in light of the widespread reporting of the judgment in many forms of media and because, in Justice Gordon's view, the public interest is sufficiently protected by the grant of declarations and injunctions.

Telstra was ordered to pay the ACCC's costs of the proceedings in full.