Optus back in court over NBN disconnection claims

27 June 2019

The ACCC has instituted proceedings in the Federal Court against Optus Internet Pty Limited and Optus Mobile Pty Limited (Optus), alleging Optus misled consumers about the need to move to the NBN or risk being disconnected.

On 24 May 2018, Optus sent an email offering its NBN broadband services to 138,988 of its mobile customers, and advising them that their broadband service would be ‘disconnected very soon’ and encouraging them to ‘make the switch, before it's too late.’

The ACCC alleges this was a false or misleading claim because, when the email was sent, Optus understood the recipients of the email were already being supplied with NBN-based services by a company other than Optus, and Optus did not have any reasonable basis for asserting they would be disconnected.

On 22 May 2018, following ACCC action, the Federal Court ordered Optus pay penalties of $1.5 million for making misleading representations to customers about their transition from Optus’ HFC network to the NBN.

“Moving to the NBN is an important decision for consumers, and it can also be a confusing process,” ACCC Commissioner Sarah Court said.

“The ACCC has had to take action about Optus’ advertising on several previous occasions, and it is concerning that we are again having to take them to court for alleged misleading statements about this issue,” Ms Court said.

“We are keeping a close eye on this sector and we will continue to take enforcement action where appropriate.”

The ACCC is seeking declarations, injunctions, pecuniary penalties, compliance orders and costs.

Background

Optus Internet Pty Limited is Australia’s third largest provider of NBN services by market share. The NBN is a wholesale-only broadband access network, being built and owned by NBN Co Ltd.

When the NBN becomes available in a residential area, consumers normally have 18 months to make a choice about moving to the NBN. After the 18 month period, broadband services using pre-NBN infrastructure are, in most cases, disconnected. A retail internet service provider like Optus may inform consumers about the possibility of disconnection towards the end of the 18 month period. However, once NBN services are connected, consumers are no longer at risk of disconnection as a result of the rollout of the NBN.

In March 2012, the Federal Court ordered Optus to pay $3.6 million in penalties in relation to the advertising of its broadband plans.

In June 2017, the ACCC accepted an undertaking from Optus to compensate consumers after an ACCC investigation into concerns that Optus was providing less data than advertised to consumers. The undertaking related to three separate incidents in 2015 and 2016.

In December 2017, Optus agreed to compensate more than 8700 customers who were misled about maximum speeds they could achieve on certain Optus NBN plans.

In May 2018, the Federal Court ordered Optus pay penalties of $1.5 million for making misleading representations to customers about their transition from Optus’ HFC network to the NBN.

The attached document below contains the ACCC’s initiating court documents in relation to this matter. We will not be uploading further documents in the event these initial documents are subsequently amended.

Concise Statement

Concise Statement ( PDF 701.98 KB )

Release number: 
103/19
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