By Patrick Avenell

Optus has today received a slamming like no other, with the Federal Court fining the telco giant $5.26 million after the ACCC successfully proved its broadband advertising was misleading.

The case in question concerned Optus advertising two types of broadband plans for its consumers: Think Bigger and Supersonic. Optus advertised these two high quota download plans as split between peak and off-peak down limits. For example, 120GB in total per month was split into 50GB peak and 70GB off peak.

Under most download plans, once either of these limits is met (almost always the peak quota), that service is then throttled (also known as ‘shaping’) to 64 kilobytes per second, significantly less than broadband speeds. The speed of the off-peak service, however, is unaffected.

What Optus did to rouse the ACCC was throttle both the peak and off-peak, meaning that users who thought they could still access broadband speeds during the off-peak hours were forced onto the slower speed once the peak quota was maxed out.

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As both a punishment to Optus and a deterrent in general, Justice Perram of the Federal Court imposed the largest civil penalty in consumer protection history.

 “This is a great result for consumers and the ACCC. The court is punishing a company that disregarded the law and misled consumers,” said ACCC chairman Graeme Samual.

“This decision sends the clear message that misleading consumers is not a legitimate business strategy. Optus is not a small business, but a large company that engaged in misleading and tricky conduct.”

“The entire telecommunications industry needs to sit up and take notice. This conduct is not acceptable, and the ACCC will seek the harshest penalties the law allows.”