Telecommunications market leaders agree to raise the bar on clarity in advertising

14 September 2009

In a significant multi-party arrangement, telecommunications industry leaders Telstra, Vodafone Hutchison (operating under the Vodafone, 3 and Crazy John's brands), and Optus (also on behalf of Virgin Mobile) have given a court enforceable undertaking to the Australian Competition and Consumer Commission that they will review and improve their advertising practices so that consumers are better informed about the telecommunications products and services they offer.

"The broader telecommunications industry has for some time walked a fine line between compliant and non compliant advertising. The ACCC welcomes the co-operation of the three major carriers in clearly articulating what is fair to consumers and what is not, and their commitment to the basic principle of truth in advertising," ACCC Chairman Graeme Samuel said today.

The ACCC identified the 12 most prevalent types of potentially misleading conduct made in telecommunications, and the three industry leaders have undertaken that their advertising will not make these claims in circumstances where they are likely to be misleading to consumers.

Some of the poor practices the agreement covers are:

  • Use of terms such as 'free',  'unlimited', 'no exceptions', 'no exclusions' or 'no catches' when this is not the case
  • Headline price offers in the form of "price per minute" for mobile phones and phone cards when there are other fees/charges which are not clearly disclosed
  • Headline claims relating to price, data allowances, total time allowances, speeds and network coverage where the claims cannot generally be sustained for all consumers.

This undertaking is part of a sustained effort launched by the ACCC earlier this year to clean up telecommunications advertising.

In announcing the acceptance of the undertaking, Mr Samuel said: "Having the three major carriers on board is a critical step, and the management of the major telecommunications companies should be applauded for taking a stand. In honouring this undertaking they will achieve significant sectoral reform in a market which is now relevant to the vast majority of Australians.

"The ACCC recognises there is more to do. The ACCC will now contact the next tier of operators who will be encouraged to adhere to the principles set out in the undertaking. When taken together with the three major carriers, this would then account for almost 90 per cent of the market for telecommunications goods and services in Australia."

"The ultimate test will come as future behaviour in the market is monitored and I remind all companies involved in telecommunications that the ACCC will continue its vigilant monitoring of their advertising practices, and will without hesitation take legal action to deal with any further flouting of the law," Mr Samuel said.

The undertaking can be found at http://registers.accc.gov.au/content/index.phtml/itemId/6029

Related register records

Release number: 
NR 224/09
Media enquiries: 
Ms Lin Enright - (02) 6243 1108
Mr Graeme Samuel - (03) 9290 1812