iiNet has paid an infringement notice of $102,000 to the Australian Competition and Consumer Commission in relation to an advertisement for its Naked DSL Service. The ACCC had reasonable grounds to believe the advertisement failed to prominently state the total minimum price payable for the service.
This is the first infringement notice to be paid by a publicly listed company for an alleged breach of the Australian Consumer Law.
The advertisement, which was displayed on the rear of a bus in metropolitan Sydney between at least 20 February 2013 and 11 March 2013, displayed the monthly price of iiNet’s Naked DSL Service of $59.95.The advertisement also displayed the total minimum price of the service. However the ACCC considered that the total minimum price was not displayed in a prominent way.
Under the Australian Consumer Law, an advertisement that promotes the monthly price of a service must also prominently state the quantifiable total minimum price for that service.
In this instance the total minimum price comprised $59.95 for each month for 24 months plus a $79.95 connection fee amounting to a total price of $1,518.75.
“Businesses need to take into account the context in which their advertisements appear. If the total minimum price is not prominent or cannot be easily seen, businesses run the risk of being in breach of the Australian Consumer Law,” ACCC Chairman Rod Sims said.
“This outcome is consistent with the continuing consumer protection work in the telecommunications sector, which is currently a priority for the ACCC.”
The payment of an infringement notice is not an admission of a contravention of the Australian Consumer Law. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.