The Australian Competition and Consumer Commission has commenced legal action against three of Australia’s largest internet and telecommunications companies, accusing Telstra, Optus and TPG of misleading consumers about the speeds available on their NBN connections.
Commencing action in the Federal Court this week, the competition watchdog alleges that each of Telstra, Optus and TPG has breached the Australian consumer law requirements by making false or misleading representations in their respective promotion of some 50mbps and 100mbps NBN plans.
The allegations largely relate to customers sold NBN connections over the Fibre to the Node connection technology, where those customers were advised that their lines were underperforming on stated maximum speeds and offered remedies to some, but not to many others.
It is also alleged that the three companies wrongly accepted payments from some customers when they were not provided with the speeds they had been promised.
While the companies promised refunds if the speeds promised to consumers could not be delivered within a certain timeframe, the competition watchdog alleges that in many cases, the companies failed to do those things and instead allowed consumers to pay more for their NBN plans than they should’ve done.
The ACCC’s Rod Sims said:
“Collectively, hundreds of thousands of consumers were allegedly misled by these three big internet providers, Telstra, Optus and TPG, which accepted payments for NBN speeds they could not provide.”
Sims said the companies had earlier given undertakings to the ACCC to provide remedies to consumers who purchased NBN plans with speeds that couldn’t be delivered.
“We are very disappointed that these companies do not seem to have taken seriously the undertakings they gave to the ACCC,” he said.
He added that the companies have promised to compensate consumers before the court case is finalised. But the ACCC is still seeking a range of orders including pecuniary penalties and compliance programs.
What’s most disappointing is that the companies did not have in place sufficient monitoring and safeguards to even determine whether customers were achieving close to what they had been sold.
Mr Sims said he was “extremely disappointed” the companies did not seem to have taken the undertakings they gave to the ACCC seriously:
If the actions are successful, the respondent companies could be forced to pay millions in dollars in pecuniary penalties.
The ACCC is also hoping to reinforce the requirement for internet service providers to be aware of the speeds their customers are achieving, and to proactively address those customers who are not able – through reasons external to their houses – to achieve the internet plan speeds they have been sold.