Telcos warned about mobile, wireless internet speed advertising

30 September 2009

The Australian Competition and Consumer Commission has issued an Information Paper to assist companies in complying with the consumer protection provisions in the Trade Practices Act 1974 when advertising mobile and wireless internet. 

"The ACCC is concerned by companies over-promising and under-delivering the speeds available on mobile and wireless internet, particularly in the context of network upgrades and increasing wireless internet subscriptions," ACCC chairman, Graeme Samuel, said today.

"This Information Paper is intended to assist the whole industry – mobile and wireless internet retailers, resellers, and network owners – to comply with the law."

In the Information Paper guidance, companies must not advertise 'maximum', 'up to' or 'peak network' speeds if those speeds are not generally achievable or likely to be achieved by consumers using the network.

Under the Act, companies must not make representations that are misleading or deceptive, or are likely to mislead or deceive.

"Companies that act in contravention of the law risk legal action," Mr Samuel warned.

The ACCC considers that any internet speed claims made by companies should be based on appropriate tests of network performance that show the speeds that can and will generally be achieved by consumers using the network on a regular basis.

Companies should also prominently state the factors affecting mobile and wireless internet speeds including congestion and location, given that different speeds will be achieved at different times depending on these variables.

"The Information Paper contains an Industry Checklist to assist companies comply with the law and we urge them to use it before advertising any existing or new mobile or wireless internet services."

This Information Paper is part of a broader ACCC crackdown on advertising in the telecommunications industry.  Telstra, Vodafone Hutchinson and Optus (including Virgin) recently gave a court-enforceable undertaking to the ACCC that they will review and improve their advertising practices so that consumers are better informed about telecommunications products and services.  This undertaking includes an agreement not to advertise and promote headline broadband speeds that represent to consumers that the speeds are available in circumstances where they are not generally available to consumers.
 
The Information Paper – Mobile and Other Wireless Internet Speed Claims and the Trade Practices Act 1974 – will be available on the ACCC website.

Links

Release number: 
NR 240/09
ACCC Infocentre: 

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Media enquiries: 
Mr Graeme Samuel - (03) 9290 1812
Ms Lin Enright - (02) 6243 1108