Internet service provider iiNet has paid a $204,000 fine following the issue of two infringement notices by the competition watchdog in relation to recent broadband advertisements.
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The Australian Competition and Consumer Commission said it issued the notices because it had reasonable grounds to believe iiNet's Naked Broadband 250GB Plan advertisements contravened Australian Consumer Law by failing to prominently state the total minimum price of the service.
iiNet's advertisements appeared on a tram and billboard in metropolitan Melbourne in November. They displayed a monthly price of $69.95 for iiNet's Naked Broadband 250GB Plan. The total minimum price was included in the advertisement's fine print but was not displayed prominently, as required by the Australian Consumer Law.
"Consumers must be able to understand the true cost of an advertised product so that they can make informed purchasing decisions," ACCC Chairman Rod Sims said.
In 2014, Telstra paid a $102,000 penalty for an infringement notice in relation to an iPhone 6 advertisement that the ACCC considered made a false or misleading representation of the total price payable by consumers.
In 2013, the High Court upheld a decision ordering TPG to pay a $2 million penalty to the ACCC in relation to misleading advertisements. The advertisements gave the impression, the ACCC said, that consumers could acquire TPG's Unlimited ADSL2+ broadband internet service for $29.99 a month when in fact it could only be acquired with a bundled home telephone line for an additional $30 a month plus start-up costs.
The ACCC website states that payment of a penalty specified in an infringement notice is not an admission of a contravention of the Australian Consumer Law. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.
In a statement to Fairfax Media, iiNet said it disagreed with the penalty.
"iiNet was surprised and does not agree with the infringement notices," a spokeswoman for the company said. "We have strived to meet the equal prominence test but given there is no clear definition of that test, ISPs are finding it hard to avoid being fined nowadays. iiNet has paid the fine despite being disappointed that these matters can't be worked through between the ACCC and the industry without formal enforcement measures being taken."
Shortly after the ACCC's announcement, iiNet said it would offer quota-free Netflix when it launches on March 24, meaning accessing the video-streaming service won't count towards an iiNet customer's internet data allowance.
