SingTel unit in trouble over ads
Aussie telco guilty of 'deceptive conduct' over broadband offer
By K. C. Vijayan, Law Correspondent
AUSTRALIAN telecommunications provider SingTel-Optus - a wholly owned subsidiary of Singapore's SingTel - is in trouble with the law in Australia over a series of misleading advertisements and could now be fined up to A$1.1 million (S$1.4 million).
The Sydney-based Australian Federal Court recently found SingTel-Optus guilty of 'deceptive conduct' under the Trade Practices Act because of a series of advertisements about its Internet broadband offers.
In the ads, the company had offered a monthly plan which would allow consumers to download a certain amount of data during peak and off-peak hours at broadband speeds.
But what it did not 'sufficiently disclose' was that if the consumer had exceeded his quota of peak hour usage for the day, the broadband speed during off-peak hours would slow substantially, said the Australian Competition and Consumer Commission (ACCS), which had taken the telecom giant to court.
This meant that a consumer would have no access to broadband-level speed even if he had yet to use any of his data allowance during off-peak hours.
The ACCS added that many common websites, such as Facebook and YouTube, cannot be used effectively as a result.
Explaining his decision in judgment grounds released earlier this month, Justice Nye Perram said the ads, which were aired on television, were 'seriously misleading'.
They failed to sufficiently inform potential consumers their broadband speeds would be 'throttled' back to sub-broadband levels, he said.
The judge also noted that in its arguments, SingTel-Optus implied that consumers do not rely on ads and cannot, under those circumstances, be misled by them.
The telco had told the court earlier that the Internet packages were not an 'impulse purchase item, like a chocolate bar or can of deodorant'.
'To the contrary, (it) was likely to have been the subject of substantial consideration by consumers prior to the moment of sale,' it said.
However, the judge felt differently.
Justice Perram said: 'This proposition sits uncomfortably with the size of the advertising campaign in question, which is clearly substantial and inconsistent with an exercise conducted sheerly for the merriment of its designers.'
He also rejected SingTel-Optus' claims that it had not breached the law because consumers who might have been misled could have been corrected at the company's call centre or website before they signed up for a plan.
Its move to cease the television advertisements voluntarily on Sept 9 also cut no ice with the judge.
'I am far from convinced either that Optus's recent cessation is anything other than opportunistic or that it signals some newly underlying comprehension of the need to avoid such tricky behaviour in the future,' he said.
The judge also ordered the telco to stop running any misleading ads for the next three years.
A hearing has been scheduled for Dec 8 to decide on the fine the telco will receive and the content of advertisements it has to run in order to correct the misconception brought about by the previous ads.
[email protected]
What it did not 'sufficiently disclose' was that if the consumer had exceeded his quota of peak hour usage for the day, the broadband speed during off-peak hours would slow substantially, said the Australian Competition and Consumer Commission, which had taken the telco to court.
Aussie telco guilty of 'deceptive conduct' over broadband offer
By K. C. Vijayan, Law Correspondent
AUSTRALIAN telecommunications provider SingTel-Optus - a wholly owned subsidiary of Singapore's SingTel - is in trouble with the law in Australia over a series of misleading advertisements and could now be fined up to A$1.1 million (S$1.4 million).
The Sydney-based Australian Federal Court recently found SingTel-Optus guilty of 'deceptive conduct' under the Trade Practices Act because of a series of advertisements about its Internet broadband offers.
In the ads, the company had offered a monthly plan which would allow consumers to download a certain amount of data during peak and off-peak hours at broadband speeds.
But what it did not 'sufficiently disclose' was that if the consumer had exceeded his quota of peak hour usage for the day, the broadband speed during off-peak hours would slow substantially, said the Australian Competition and Consumer Commission (ACCS), which had taken the telecom giant to court.
This meant that a consumer would have no access to broadband-level speed even if he had yet to use any of his data allowance during off-peak hours.
The ACCS added that many common websites, such as Facebook and YouTube, cannot be used effectively as a result.
Explaining his decision in judgment grounds released earlier this month, Justice Nye Perram said the ads, which were aired on television, were 'seriously misleading'.
They failed to sufficiently inform potential consumers their broadband speeds would be 'throttled' back to sub-broadband levels, he said.
The judge also noted that in its arguments, SingTel-Optus implied that consumers do not rely on ads and cannot, under those circumstances, be misled by them.
The telco had told the court earlier that the Internet packages were not an 'impulse purchase item, like a chocolate bar or can of deodorant'.
'To the contrary, (it) was likely to have been the subject of substantial consideration by consumers prior to the moment of sale,' it said.
However, the judge felt differently.
Justice Perram said: 'This proposition sits uncomfortably with the size of the advertising campaign in question, which is clearly substantial and inconsistent with an exercise conducted sheerly for the merriment of its designers.'
He also rejected SingTel-Optus' claims that it had not breached the law because consumers who might have been misled could have been corrected at the company's call centre or website before they signed up for a plan.
Its move to cease the television advertisements voluntarily on Sept 9 also cut no ice with the judge.
'I am far from convinced either that Optus's recent cessation is anything other than opportunistic or that it signals some newly underlying comprehension of the need to avoid such tricky behaviour in the future,' he said.
The judge also ordered the telco to stop running any misleading ads for the next three years.
A hearing has been scheduled for Dec 8 to decide on the fine the telco will receive and the content of advertisements it has to run in order to correct the misconception brought about by the previous ads.
[email protected]
What it did not 'sufficiently disclose' was that if the consumer had exceeded his quota of peak hour usage for the day, the broadband speed during off-peak hours would slow substantially, said the Australian Competition and Consumer Commission, which had taken the telco to court.
