On 7 November 2017, Australian telecommunications giant Telstra Corporation Limited (Telstra) gave a court-enforceable undertaking to the Australian Competition and Consumer Commission (ACCC) to provide remedies to approximately 42,000 affected consumers by representations it made about available internet speeds on broadband plans supplied over the National Broadband Network (NBN).
Telstra sold to consumers broadband speed plans for its NBN service based on representations that the speed plans could provide up to a set number of megabits per second when in reality these maximum speeds were not possible given the capability of many consumers' internet connections.
Following an investigation into broadband speeds by the ACCC, Telstra acknowledged that the representations as to speed were likely to contravene the Australian Consumer Law (ACL). The ACL prohibits businesses engaging in conduct that is misleading and deceptive and specifically prohibits making false or misleading representations about the quality or performance characteristics of a particular service.
In its undertaking to the ACCC, Telstra agreed to offer approximately 42,000 affected consumers the option to receive a refund for the relevant speed charges and either change speed plans or exit their existing plan without cost.
This action serves as a reminder to broadband and IT service providers generally to ensure that when marketing their internet services to consumers, the attributes advertising must in fact be capable of being achieved in real world conditions, lest they risk exposure to significant penalties or court-enforceable undertakings to the ACCC.
The ACCC media release is available here.