Federal Court says no to Optus 7 March 1996 Optus Communications Pty Ltd and Optus Mobile Pty Ltd had engaged in misleading and deceptive conduct in its Freestyle digital mobile phone promotion, the Federal Court ruled yesterday after action by the Australian Competition and Consumer Commission.

"In its television commercials, Optus offered free local calls on weekends worth up to $52 per month without disclosing that this offer excluded calls to other mobile phones," ACCC Chairman, Professor Allan Fels, said today. "The ACCC considered that the brief appearance of a small print disclaimer 'some exclusions apply' was grossly inadequate."

Justice Tamberlin agreed, stating: "I doubt whether a reasonable viewer would appreciate that there was any significant exclusion which flew in the face of the dominant representation of free local calls."

The Commission also alleged that during a number of telephone inquiries made by Commission officers to Optus, the limitations still were not pointed out.

In giving judgement in favour of the ACCC, Justice Tamberlin said that "there has been a continuing serious breach of the [Trade Practices] Act over a period of more than two months throughout an intensive promotion campaign. It was necessary for the TPC [now the ACCC] to bring these proceedings to ensure that proper measures were taken by Optus to prevent misleading of the public.

"Optus has, consistently up to September 1995, refused to concede that the advertisements were misleading. On the evidence of the Commission, which I accept, it is evident that the measures taken by Optus, to dispel any false impression inherent in the television advertisement, when left to its own initiative were inadequate," Justice Tamberlin said.

The Court decided to declare that Optus has breached Sections 52, 53(c), 53(e) and 53(g) of the Act and to order permanent injunctions restraining Optus from such conduct in future promotion of its Freestyle digital mobile phone package.

"This is an important decision for consumers and businesses", Professor Fels said. "It is useful for business because it highlights the need to adequately qualify promotional offers, particularly if they are somewhat innovative. Consumers should be informed right up front about all the important aspects of any offer."

"As Justice Tamberlin said yesterday, it is not a defence to say that the consumer has failed to check the accuracy of the representations or to ascertain the applicable exclusions. Disclaimers such as 'exclusions apply', particularly when much less prominent than the original statement, are just not good enough.

"The Commission is still particularly concerned with the conduct occurring in the mobile phone industry. The mobile phone market is experiencing rapid growth and there are a large number of first time buyers who may be particularly susceptible to misleading conduct, and sharp practice, and may feel themselves unable to query or challenge the practices of some players in the market."