After nearly a year since the ACCC investigation, Dodo Services Pty Ltd and iPrimus Telecommunications Services Pty Ltd are fined $2.5 million for misleading their consumers about their NBN broadband speeds.
Dodo and iPrimus, both subsidiaries of Australia’s fourth-largest telecommunications operator Vocus, admitted they misled consumers with their ‘typical evening speed’ claims as they were not based on an appropriate testing methodology.
The Federal Court has ordered Dodo to pay $1.5 million in penalties. Meanwhile, iPrimus has been given a $1 million fine.
“Accurate information about broadband speeds, particularly during the busy period when consumers are most likely to use their services, is essential for consumers to be able to compare broadband offers and pick the best service for their needs,” ACCC Chair Rod Sims said.
“The ACCC brought this case because we were concerned that the methodology which the Vocus Group used as the basis for its speed claims cherry-picked only the fastest speeds its network could deliver and ignored the slower speeds many of its customers experienced.”
By making false statements on their NBN broadband speeds, ACCC Chair Sims said Dodo and iPrimus’s consumers were not able to accurately compare different broadband offerings and make informed choices on their broadband provider.
The Australian Consumer Law explicitly states that service providers are forbidden to make false or misleading representations about the performance characteristics of their services. This includes representations about future matters that are not based on reasonable grounds.
The ACCC has been improving consumer outcomes through the Measuring Broadband Australia Program over the recent years. They have also been improving the provision of its Broadband Speed Claims guidance and taking enforcement action against a range of providers.
“Despite clear ACCC guidance on making broadband speed claims, Vocus Group used a flawed methodology which was inconsistent with that guidance, and misled consumers about the speeds of its plans,” ACCC Chair Sims said.
Justice Murphy said Dodo and iPrimus chose not to adopt the methodology proposed by the ACCC. Instead, the two subsidiaries developed and applied their parent company’s methodology, which had a number of deficiencies.
This action was material to the penalties the Federal Court imposed on the two companies.
Dodo and iPrimus have co-operated with the ACCC’s investigation since 22 June 2020. They have admitted liability and agreed to make joint submissions to the Court in relation to penalties and other orders.