On 7 March 2012 the Full Federal Court ordered Optus to pay $3.61 million in civil pecuniary penalties in relation to advertising for the 'THINK BIGGER' and 'SUPERSONIC' broadband internet plans.

This judgment followed a successful appeal by Optus against orders made by Perram J that Optus pay civil pecuniary penalties totalling $5.26 million for breaches of the Trade Practices Act 1974. The Full Federal Court allowed the appeal and set aside the penalties originally ordered on the basis that the primary judge erred in making certain factual findings.

However, the Full Federal Court supported the initial findings in relation to the seriousness of the conduct and the need for a substantial penalty: [66] "this court should proceed on the footing that Optus' conduct was very serious. The contraventions were on a grand scale. They were also unexplained."

68]:"Optus cannot be regarded as a first offender. It failed to observe the requirements of the Act, and not for the first time. The absence of a satisfactory explanation for the contraventions and the evident laxity in its internal compliance program... mean that Optus has given the court no reason to be confident that, in the absence of a very substantial penalty, it will not regard as acceptable the risk of a fine for contravention."

The Court rejected arguments by Optus that it was excessive for the primary judge to impose a penalty which amounted to "profit stripping." Rather, the Full Federal Court said a penalty which did not substantially affect the profitability of Optus' campaign could not be countenanced:

[63] "generally speaking, those engaged in trade and commerce must be deterred from the cynical calculation involved in weighing up the risk of penalty against the profits to be made from contravention."

Background

Optus launched the "THINK BIGGER" campaign on 25 April 2010 and the "SUPERSONIC" campaign on 2 August 2010. Optus advertised these plans through a variety of media, including television, newspapers, billboards and direct marketing. In advertising these broadband plans, Optus represented that for a monthly payment, a consumer would receive a headline data allowance of broadband which was then split into peak (midday to midnight) and off-peak (midnight to midday) data allowances.

The ACCC alleged that Optus had not sufficiently disclosed that the service would be speed limited to 64kbps at all times once a consumer exceeded their peak data allowance. The consequence was that any unused off-peak data would no longer be available at a broadband speed and that a consumer, in certain circumstances, would not be able to use the total headline allowance once the speed had been throttled back.