Federal Court of Australia

Australian Competition and Consumer Commission v Optus Mobile Pty Limited [2025] FCA 1177

SUMMARY

In accordance with the practice of the Federal Court in cases of public interest, the following summary has been prepared to accompany today’s orders. The summary is intended to assist the public to understand the outcome of this proceeding. It is not a complete statement of the conclusions reached by the Court. The only authoritative statement of the Court’s reasons is contained in the published reasons for judgment which will be made available on the Court’s website. The summary will also be made available there.

On 31 October 2024 the applicant, the Australian Competition and Consumer Commission, commenced proceedings against the respondent, Optus Mobile Pty Ltd, a wholly owned subsidiary of Singapore based Singtel Optus Pty Ltd and part of the Optus group of companies, alleging contraventions of ss 18, 21 and 29(1)(i) of the Australian Consumer Law.

Optus has admitted to the contraventions and the parties have provided the Court with a Statement of Agreed Facts and Admissions, as well as joint submissions. The SAFA is very long and is attached to my reasons as Schedule 1.

The parties have agreed to orders by way of relief. The agreed orders comprise declarations as to Optus’ contraventions, an order that Optus pay a pecuniary penalty of $100 million, an order requiring Optus to publish a notice in agreed terms regarding its contraventions, and an order that Optus pay the ACCC’s costs of and incidental to the proceeding.

Separate to the orders sought, Optus has also provided the ACCC with an enforceable undertaking pursuant to s 87B of the Competition and Consumer Act 2010 (Cth), which includes requirements for Optus to implement improvements to address its contravening conduct.

Notwithstanding the parties have agreed to a pecuniary penalty, the Court is not bound by that agreement and it is incumbent upon the Court to determine the appropriate penalty in the exercise of its discretion, having regard to all relevant matters. Ultimately the question is whether the agreed penalty is one that is both just and appropriate when considered against the several principles that apply to the fixing of a civil penalty, primarily deterrence. It is not simply a question of whether the proposed pecuniary penalty falls within the appropriate range, although that is a consideration. So too, a relevant consideration carrying significant weight is that the ACCC as regulator and Optus as contravener have jointly proposed a penalty.

Optus’ conduct involved inappropriate sales practices across 16 stores in South Australia, Queensland, the Northern Territory, Victoria, Western Australia and Tasmania, engaged in between August 2019 and July 2023. The conduct comprised three categories of unconscionable conduct, which I refer to in my reasons as the Mount Isa Conduct, the 24 Consumers Conduct, and the Darwin Conduct. It also involved one category of misleading or deceptive conduct relating to four of the 24 consumers the subject of the second category of unconscionable conduct.

The Mount Isa Conduct involved inappropriate debt collection practices resulting from failures in Optus’ credit check systems. Those failures enabled Optus sales staff to make unauthorised changes to consumer details such that approvals could be obtained for higher credit amounts by what appeared to be fraudulent means.

Despite concerns emerging from an internal investigation report in relation to Optus’ system failures which allowed these unauthorised contracts to be written, Optus undertook debt recovery action against 42 consumers the subject of those contracts, with those consumers experiencing adverse impacts including excessive and repeated phone calls, threats of default listings, and in some cases, actual listings with credit reporting bodies. Many of the affected consumers were First Nations Australians and were vulnerable.

The second category of unconscionable conduct concerned coverage check failures, credit check failures, unfair sales practices, inappropriate contract management and exploitative debt collection processes affecting 24 consumers. Four of these consumers were also subjected to misleading or deceptive conduct, with Optus sales staff having made false or misleading representations regarding the price of goods and services to them. Optus acknowledges that in relation to most of the 24 consumers, Optus’ management knew or ought to have known of the risk of the inappropriate conduct, even if they were not aware of the specifics of the conduct. Many of the affected consumers were vulnerable.

The third category of unconscionable conduct, the Darwin Conduct, involved systemic patterns of inappropriate conduct, including undue pressure and influence, a failure to explain the terms and conditions of contracts, a failure to conduct coverage checks, a failure to conduct credit checks, mis-selling and overselling of accessories, identity verification failures, and inappropriate conduct in relation to debt collection. Almost all of the contravening conduct in Darwin occurred in circumstances where Optus’ senior management knew or ought to have known of the inappropriate conduct from what happened in Mount Isa, internal investigations, whistle blower reports, and complaints made to the Telecommunications Industry Ombudsman. Again, the inappropriate conduct was directed at vulnerable consumers, a significant number of whom were First Nations Australians.

The conduct the subject of these three categories of unconscionable conduct is extremely serious and can only be described as appalling.

Optus senior management knew or ought to have known of the system failures that allowed the unconscionable conduct, which may rightly be described as predatory, to occur yet failed to act with any sense of urgency. In failing to act notwithstanding knowledge, senior management abrogated their management responsibilities and consequently Optus abrogated any semblance of responsible corporate behaviour.

As I have alluded to, of particular concern is the fact that Optus’ conduct predominantly affected vulnerable consumers, including people with mental disabilities, people suffering from financial hardship, those with low financial literacy, and people with limited English proficiency and/or learning difficulties. Many of the vulnerable consumers were also First Nations Australians from regional, remote and very remote communities.

After considering all of the relevant matters, I have decided to make the orders sought by the parties.

In determining that $100 million is an appropriate pecuniary penalty, I have had regard to the central purpose of such penalties, being deterrence, both specific (i.e. Optus itself) and general (i.e. others who may think that contravention would pay and that detection would lead merely to a compliance program). I have also considered the various factors used in determining an appropriate penalty, including Optus’ size and financial capacity, the serious nature and extent of the contravening conduct and the damage caused, the role of management and their level of awareness of the contravening conduct and Optus’ prior conduct.

I have taken into account Optus’ co-operation, corrective action and contrition. I have also taken into account that Optus has provided the ACCC with an enforceable undertaking pursuant to s 87B of the CCA which is directed at addressing and preventing the various factors that led to the unconscionable conduct.

O’SULLIVAN J

24 SEPTEMBER 2025, ADELAIDE