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Posts Tagged ‘ISP’Optus hit with $5.26 million fineMonday, July 11th, 2011 Optus has been hit with a $5.26m penalty in the Federal Court, for falsely advertising broadband download quotas. The decision heralds a new level of risk in communications advertising in Australia. The clear rule is that high-powered headlines plus small print equals advertising danger. This bulletin explains:
What Optus advertised (a) In April 2010, Optus campaigned for a new range of ‘Think Bigger’ broadband plans. (b) Each plan included a large data allowance (120/150/170GB) divided into ‘peak’ and ‘off-peak’ entitlements eg the 120GB plan was advertised with 50GB peak usage and 70GB off-peak usage allowance. (c) The disclaimers stated: ‘Speed limited once peak data exceeded’. How the advertised plans really worked (a) When peak allowance was used, entire service was shaped to 64kbps for rest of month. (b) Shaping applied to remaining off-peak allowance as well. (c) So, for instance, if customer used whole 50GB peak allowance first, then entire 70GB off-peak allowance shaped to 64kbps. (d) But if off-peak was exhausted first, further off-peak MBs were deducted from peak allowance, and shaping applied when that was exhausted. How Optus defended the plans Optus said that ‘Speed limited once peak data exceeded’ was a sufficient explanation: Once your peak allowance is reached, speed is limited. Why ACCC took action ACCC disagreed that the disclaimer was a clear and proper explanation. It argued: (a) Public would assume that peak and off-peak entitlements were independent. (b) Public would not understand that exhausting peak use would result in off-peak speed shaping to non-broadband speed. What the court said and did in 2010 (a) The court agreed with ACCC. (b) Court said that ordinary people simply wouldn’t understand the full rules of the plans, based on the advertising. (c) Court particularly attacked ‘headline advertising’ where a powerful headline told one story and small print told a different story. (d) Said there was:
(e) 29 October 2010: Court ruled that advertising was deceptive. (f) 2 November 2010: Court banned Optus from repeating that kind of advertising for 3 years[1]. (g) 19 November 2010: Court ordered Optus to write to all affected customers offering remedies. (h) 8 December 2010: Court held a penalty hearing. What the court did on 7 July 2011 Announcing the result of the penalty hearing, the court ruled that Optus must pay the Commonwealth a pecuniary penalty of $5.26m. Why a $5.26m penalty is now possible (a) Before 2010, no financial penalty was possible under the law in a case like this. (b) In 2010, the Competition and Consumer Act[2] (‘CCA’) was amended to allow the court to impose penalties on a company of up to $1.1m per breach of certain sections of the CCA. That includes breaches of the law against misleading about ‘the quantity of services’. Other provisions that can attract penalties The new penalties are available for a wide range of breaches that communications providers should keep in mind. Here’s a non-exhaustive list: (a) misrepresentations that goods are of a particular standard, quality, value, grade, composition, style or model (b) misrepresentations that services are of a particular standard, quality, value or grade (c) misrepresentations that a particular person has agreed to acquire goods or services (d) misrepresentations that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits (e) misrepresentation that the person making the representation has a sponsorship, approval or affiliation (f) misrepresentation with respect to the price of goods or services (g) misrepresentation concerning the availability of facilities for the repair of goods or of spare parts for goods (h) misrepresentation concerning the need for any goods or services. Summary Obviously, communications advertising has just become more challenging. It’s a strong argument for having every advertisement checked by an expert in the area. [1] That doesn’t make it legal in three years. It means that, should Optus break the ban, it will incur even higher penalties. [2] As it is now called … it was then the Trade Practices Act.  Tags: Federal Court of Australia, ISP, isp law, ISP Lawyers, MIsleading and Deceptive Conduct, Optus, telecommunications law, Telecommunications Lawyers, Trade Practices Law Cooper Mills Bulletin on ACMA CrackdownWednesday, June 1st, 2011 The Australian Communications and Media Authority today foreshadowed six telco / ISP action areas it intends to address. While the six areas are described as ‘proposals’, ACMA is making it very clear that they will become law. ACMA Chairman Chris Chapman is reported in today’s Age Online as follows: You can read more about in the Cooper Mills Telecommunications Law Bulletin. Tags: ACMA, Chris Chapman, ISP, isp law, IT Law, Telco, Telco Lawyers, Telecom Lawyers, Telecommunications Lawyers Telecommunications industry leads Do Not Call Register complaintsMonday, January 19th, 2009 Telecommunications companies have been the biggest offenders for contacting people on the Do Not Call Register, according to the Australian Communications and Media Authority (ACMA). The Do Not Call Register was introduced on 31 May 2007 to allow individuals to stop receiving a wide range of unsolicited telemarketing calls. ACMA is responsible for overseeing the register’s operation and for investigating breaches of the Do Not Call Register Act. In the first year of the register’s operation, telecommunications companies were responsible for 55 per cent of complaints received by ACMA. The complaints have resulted from unwanted calls promoting phone plans and other related services. The ACMA have signalled a new approach, with ACMA Chairman Chris Chapman stating “Businesses have had ample time to adjust to the new laws and by now should have robust compliance measures in place,”. We think that this new approach will result in more investigations and potential prosecutions, fines or enforceable undertakings. It is even more reason for business to increase vigilance when planning marketing campaigns in particular. There are services available to allow call lists to be ‘washed’ against the Do Not Call Register to assist with statutory compliance. Key facts *During 2007–08, there were 28,804 complaints received. *Of these, 23,336 involved potential breaches of the Do Not Call Register Act. *Over the past 12 months, ACMA has issued four infringement notices to telecommunications companies. This includes a penalty of close to $150,000 issued to Dodo Australia. *ACMA has accepted enforceable undertakings from Dodo, as well as Astron Communications and People Telecom. Formal warnings have also been issued to Global Telelinks, Ezycall and m8 Telecom. *ACMA estimates that 5 per cent of the businesses involved in complaints are responsible for approximately 70 per cent of the total complaints received. ACMA’s formal investigations are focusing on these businesses. Tags: ACMA, Do Not Call Register Act, ISP, ISP and Telco Law, statutory compliance, telcos, telecommunications Penalties a spam warning for ISPs and TelcosMonday, January 19th, 2009 In a decision that should send a warning to all Australian ISPs and Telcos, Optus Networks Pty Ltd (‘Optus’) has been fined $110,000 for breaching the Spam Act 2003. The penalties were the result of two infringement notices issued by the Australian Communications and Media Authority (ACMA) after Optus allegedly sent electronic messages without accurate sender identification. The infringements The infringement notices were in relation to 20,000 commercial electronic messages sent by Optus to the carrier’s mobile phones users, to promote its OptusZoo entertainment service. The messages were sent with a sender identification of ‘966’ (these numbers spell out ‘Zoo’ on a phone keypad). ACMA claims that Optus assumed that recipients of the messages would make the connection between ‘966’ and ‘Zoo’. As we all know, 966 can represent a number of different words on a key pad, for example Zon or Yon. Spam Act 2003 The Spam Act 2003 regulates unsolicited commercial electronic messaging in Australia. Commercial electronic messages include emails, SMS messages and MMS messages. The Act sets outs that commercial electronic messages must involve direct or inferred consent, identify the sender and give the recipient the ability to unsubscribe. The Spam Act provides a range of enforcement options, including formal warnings, enforceable undertakings, infringement notices and Federal Court proceedings. The legislation sets out penalties of up to $1.1 million a day for repeat corporate offenders. We think that this will not be the last of the fines in light of a chain of recent investigations in the ISP Telco market, and comes hot on the heels of an enforceable undertaking given by Oxygen8 Communications last month. It is still surprising to see that many clients still come to us with marketing campaigns for review, which in some way fall foul of the Spam Act – of even more surprise is that simple Spam Act compliance requirements, such as functional unsubscribe facilities, were not included in proposed email campaigns. Tags: ACMA, email, Fines, ISP, ISP and Telco Law, MMS, Regulatory compliance, SMS, Spam, Spam Act 2003, Telco |
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