Optus to pay $1.5 million for misleading customers during NBN transition

23 May 2018

The Federal Court has ordered Optus Internet Pty Ltd (Optus) to pay penalties of $1.5 million for making misleading representations to customers about their transition from Optus’ HFC network to the National Broadband Network (NBN).

From October 2015 to March 2017, Optus told around 14,000 of its customers that their services would be disconnected (in as little as 30 days in some cases), if they did not move to the NBN. Under the terms of its contract, Optus could not force disconnection within the timeframe it claimed.

Optus also made misleading representations to customers that they had to sign up to Optus’ NBN services, when they could have chosen any internet service provider.

Optus benefited by around $750,000 as a result of the conduct.

“Optus pressured customers by misrepresenting the time period in which services could be disconnected,” ACCC Chairman Rod Sims said. 

“Businesses should not make false representations which distort customers’ decision making.  This is particularly important when many Australians are moving to the NBN for the first time.”

“It is illegal for businesses to mislead their customers and create a false impression through their communications. Today’s penalty serves as a warning to all businesses that such behaviour will be met with ACCC action.”

Since the ACCC investigation commenced, Optus has paid $833,000 in compensation to affected customers for the disconnection of their services.

Background

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

Optus was entitled to receive migration payments from NBN Co for each of its customers that moved from the Optus HFC network to an NBN based service. Obtaining these payments became part of Optus’ annual financial targets and was referred to by Optus as “bounty”.

The ACCC instituted proceedings against Optus in December 2017. Since the ACCC commenced its investigation, Optus has co-operated, including agreeing to a Statement of Agreed Facts and Joint Penalty Submissions leading to this decision.

Release number: 
90/18
ACCC Infocentre: 

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