By Claire Reilly

TPG will be forced to pay $2 million in penalties for false and misleading advertising of its $29.99 Unlimited ADSL2+ broadband plan, following a ruling by the Federal Court in November last year.

Speaking about the fine, which resulted from action taken by the Australian Competition and Consumer Commission, ACCC chairman Rod Sims said it sent a broader message to the industry as a whole.

“This decision should send a strong warning to telecommunications and internet providers that they cannot continue to take risks in their advertising or they could end up in court and be exposed to substantial penalties,” said Sims.

“The ACCC is committed to taking a hard line to secure a culture of compliance by telecommunications providers and improve marketing in the telecommunications industry.  The ACCC will continue to take court action in order to achieve this.”

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The $2 million in “civil pecuniary penalties” resulted from the Federal Court’s ruling that advertising of the TPG plan was misleading, because the plan required consumers to pay for home line rental and additional upfront charges. The court found that advertising for the $29.99 Unlimited ADSL2+ plan also failed to “prominently specify” the minimum costs of the service.

As part of the penalty, TPG has been ordered to “publish corrective notices, to maintain a trade practices compliance program for 3 years and to pay the ACCC’s costs”.

“The conduct was seriously misleading and affected a diverse class of users and potential users of broadband services,” said Justice Murphy of the Federal Court. 

His Honour added that TPG understood “that there was a risk that its conduct might constitute misleading conduct” and that the company “should have adopted a more cautious approach”, commenting that the penalty was “necessary to make it clear to TPG and to the market that the cost of risking a contravention cannot be regarded as merely an acceptable cost of business”.