Optus Internet Pty Limited - s.87B undertaking

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Optus Internet Pty Limited (Optus Internet) for allegedly making misrepresentations about the data transfer rates (speeds) offered on its broadband cable service and particular plans. Optus Internet has also paid a penalty of $51,000 following the issue of five Infringement Notices by the ACCC.

Optus Internet is a provider of internet services to residential and small business customers in Australia.

Between January 2015 and August 2015 Optus Internet used the words ‘NBN-like speeds’ and words to similar effect (NBN-like speeds representations), through a variety of mediums including websites, billboards, posters, catalogues and flyers, in the promotion of its broadband cable service and particular broadband cable plans.

The ACCC was concerned that that Optus Internet’s use of the term ‘NBN-like speeds’ represented that the advertised cable broadband plans provided speeds that were comparable to the speeds available on the National Broadband Network (NBN) plans, when that was not the case for the plans Optus advertised.

Specifically, the ACCC considers Optus Internet made the following false or misleading representations in contravention of sections 18, 29(1)(g), 29(1)(i) and 34 of the Australian Consumer Law (ACL) contained in Schedule 2 of the Competition and Consumer Act 2010 (CCA):

• advertisements that promoted particular broadband internet cable plans that the download and upload speeds in relation to those plans were comparable to the speeds available on the NBN, including the download and upload speeds available on the NBN’s 50/20 and 100/40 megabits per second (Mbps) services, when that was not the case; and

• advertisements that promoted its cable broadband internet service in general, that the upload speeds of that service was comparable to the upload speeds available on the NBN, including the upload data transfer rates of 5 Mbps,10 Mbps, 20 Mbps, and 40 Mbps available on the NBN, when that was not the case.

To address the ACCC’s concerns, Optus Internet has provided the ACCC with a section 87B undertaking in which it has admitted that its conduct may have contravened the ACL and that it will:

• for a period of five years not use NBN-like speeds representations in the promotion of its cable broadband internet service, in circumstances where it does not offer upload and download speeds which are comparable to the upload and download speeds available on the NBN;

• write to its customers who acquired its cable broadband internet service between 1 January 2015 and 23 August 2015 (the Customers) advising them of the manner in which Optus Internet’s use of the term ‘NBN-like speeds’ was misleading;

• allow the Customers to cancel their cable broadband internet service at no cost and refund to them any start-up fee they paid to acquire the service; and

arrange for an independent third party to review its trade practices compliance program and implement any changes recommended by that party.