FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 2) [2010] FCA 1200

REASONS FOR JUDGMENT

1                     The parties are in disagreement about the form of the orders.  There are six disagreements.

2                     First, the Commission says that the injunction should last for five years but Optus says that three years is appropriate.  This is because, so it is said, there may be technological developments over that period which may have some impact on the question; it is also because public knowledge of the internet, and in particular broadband services, may have improved to the extent that such advertising may not be misleading in three years time.  I accept Optus’ submission.  Five years is a long time in the marketing of internet plans and I am not prepared to grant relief to that extent.  I will, however, grant three years.

3                     Secondly, the Commission seeks injunctive orders which would forbid the “supplying, or offering to supply, or promoting the supply” of services whereas Optus submits that the order should be directed only to advertising.  Optus says this is so because the proceeding is entirely concerned with advertising identified in the primary judgment (Australian Competition and Consumer Commission v Singtel Optus Pty Ltd [2010] FCA 1177) and that a broader injunction may affect matters passing between its staff or contractors and customers outside an advertising context.  The Commission says that its phraseology comes from the Trade Practices Act 1974 (Cth) (“the Act”).  I prefer Optus’ submissions on this issue.  The case was run about a series of identified advertisements and not on some other basis.  There may well be matters of defence going to the broader notions of supply which I have not heard.  Although it is not material, the provisions of the Act I have found to be infringed do not use the language of the Commission’s proposed orders and that language also does not appear in the remedial provisions of ss 80 or 87 either (although cf. ss 51AB, 51AC, 53C and 58).

4                     Thirdly, the Commission seeks an injunction with respect to the offering of internet broadband services generally whereas Optus seeks an order referable only to the sale of broadband plans.  There was no evidence before me to suggest that the practice impugned by the Commission was occurring outside the context of plans and, indeed, it is very difficult to understand how the present problem could so arise.  The order will be limited to plans.

5                     Fourthly, the Commission sought orders which would apply not only to plans which offer, for example, 120GB of usage (split into 50GB peak and 70GB off-peak) but also by reference to plans which are expressed to be for a maximum of 120GB so split.  The presently indicated amended version of Optus’ advertising, as of last Tuesday, 26 October 2010, (the day before the present trial commenced) was for “Up to 120GB”.  A case about whether that form of advertising was misleading was not at issue last week and could not reasonably have been litigated in light of that information only being provided in an affidavit on Tuesday.  I will not permit now a new and separate case about the form of the new advertisement to be conducted under the guise of formulating orders about the old advertisements.  What I have found infringes the Act is the form of advertising identified in the judgment.  This aspect of the proposed orders by the Commission should not be made.  If the Commission wishes to start a separate case about the advertisement that is a matter for it.

6                     Fifthly, both parties agreed (in light of the primary judgment) that an order was necessary to ensure that consumers were informed of the correct position where advertising of the plans under consideration was concerned.  However, the Commission wished to see those qualifications “clearly and prominently” displayed whereas Optus wished only that they be “adequately” exposed.  The Commission’s position is to be preferred.  The standard proposed by Optus is vague as to the perspective from which adequacy is to be judged.  It is true that I used the word “adequate” at paragraph [41] in the primary judgment, however, my use of that word was not intended to shape the form of relief.

7                     Sixthly, the Commission sought the inclusion of a qualification the substance of which was that if the peak usage data allowance was reached the service would be throttled back to a stated speed both for peak and off-peak period usage and that the remaining off-peak allowance, once the peak allowance was reached, would be provided at the throttled speed.  Optus, on the other hand, submitted that the qualification should only be required to disclose the fact that if the peak allowance was used up then the speed of the service would be limited for both peak and off-peak usage.  I prefer Optus’ submissions.  The Commission effectively seeks to re-agitate my conclusions about the extent to and the manner in which Optus is obliged to reveal the speed limitation. 

8                     In those circumstances I make the following orders:

1.      The respondent, for a period of three years from the date of these orders, whether by itself, its servants or agents or otherwise howsoever, be restrained from advertising broadband internet plans under which:

1.1               for a specified monthly sum, the customer is supplied with a monthly data allowance which is divided between peak and off-peak periods; and

1.2               if the customer exceeds the monthly data allowance for the peak period the speed of the internet service will be limited for both the peak and off-peak periods for the remainder of that month

without clearly and prominently disclosing in the advertisements for those plans the facts set out in paragraph 1.2 above.

2.      The respondent pay the applicant’s costs to date

Associate:

Dated:         2 November 2010