Recently, following an Australian Competition and Consumer Commission (“ACCC”) investigation, the Federal Court has ordered Dodo Services Pty Ltd (“Dodo”) and iPrimus (“the Companies”) to pay a combined $2.5 million in penalties for misleading and deceptive conduct in advertising their broadband speeds. The Companies are part of the same telecommunication group.
The ACCC questioned a number of claims Dodo had made between November 2015 and March 2018 in relation to their NBN speeds. Dodo made a statement that their broadband services were “‘perfect for streaming’ including broadband plans that used the NBN 12 megabits (Mbps) download and 1 Mbps upload wholesale access speed tier (12/1 Plan) and broadband plans with a monthly data allowance of 10 gigabytes (GB)”.
This statement was used as a promotional piece and featured on the website and printed pamphlets.
The ACCC, being the consumer watchdog, had concerns about these claims as they found that the Mbps and GB plans were not ‘perfect for streaming’ and instead were limited to a modest amount of streaming including one HD video at a time.
The ACCC had further concerns that the broadband speeds for both Companies were not based on the appropriate testing methods approved by the ACCC. By advertising these broadband speeds, it would prohibit consumers from being able to compare competitive broadband offers when selecting a provider
Misleading and Deceptive Conduct- what the law has to say
The case of Competition and Consumer Commission v Dodo Services Pty Ltd  FCA 589 addressed the Companies breaches of the Australian Consumer Law (“ACL”), and in particular, Section 18.
Section 18 of the ACL notes that a person must not engage in conduct that is likely to mislead or deceive. It is important to note that misleading and deceptive conduct does not need to result in a loss suffered from the conduct and there is no intentional element. As such, misleading and deceptive conduct simply, and at face value, is conduct that is likely to create a false impression to consumers.
In addition to Section 18, the Companies were also found to be in breach of:
- misleading representations concerning performance characteristics; and
- engaging in conduct that is liable to mislead the public as to nature and the characteristics of their service.
The case of Competition and Consumer Commission v Dodo Services Pty Ltd  FCA highlights the potential ramifications for companies and business when it comes to misleading and deceptive conduct. Companies and business must be truthful and transparent in advertising their products and services.
It is not morally or legally right to engage in conduct that is likely to mislead or deceive consumers.
For more information on misleading and deceptive conduct, contact our commercial team at Coutts.
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