ACCC demands Optus label throttled speeds "sub-broadband"

Ry Crozier | Oct 27, 2010 1:48 PM
Defence centres on "context" of advertisement.

Competition watchdog the ACCC has said that Optus should have advertised that users of its unlimited plans would be throttled to "sub-broadband" speeds after exceeding their peak download quotas.

The ACCC filed the case against Optus over advertisements for bundled phone and internet products that it claimed were misleading and deceptive.

In the Federal Court in Sydney today, ACCC lead barrister Neil Williams SC argued that the carrier should have more clearly told consumers that the "broadband" aspect of the plan was limited to set peak and off-peak download limits, and that after one limit had been exceeded they faced "sub-broadband" browsing speeds until the end of the billing cycle.

Williams argued whether a consumer could find "any constructive use for 64 Kbps" - the designated throttle speed used by Optus on the plans in question - and claimed that it should be made clearer in advertisements that users would be throttled to a speed that was not "broadband".

"[The advertisement] doesn't say the speed will be limited to sub-broadband, that it won't be broadband any more once a consumer reaches [their limit]," he said.

"[There's] no disclosure of a sub-broadband speed for what has been promoted as a broadband product."

Optus has since stopped screening the contentious advertisements on TV and has amended the content of advertisements that continued to be screened online, the court heard today.

Both parties in the case tabled multiple objections to evidence and affidavits filed in the Federal Court.

In particular, the competition watchdog objected to alleged attempts by Optus to put a "wider context" around the advertisements, believing that it was not relevant.

The parties agreed that the hearings would not "discuss penalties or corrective advertising" but there was some dispute on whether arguments would be heard that pressed for an injunction that prevented Optus from running the advertisements in any medium.

Web statistics

Much of the morning dealt with a series of objections to apparent attempts by Optus to introduce folders of web statistics, upon which the carrier would seek to enforce a claim of confidentiality and upon which the ACCC would seek a ruling on relevance.

Williams, representing the ACCC said that Optus' case was "the wider context within which the advertisements were viewed, [which[ includes things which may or may not happen subsquent [to seeing the advertisement, such as] if a consumer goes into an Optus shop or contacts an Optus salesperson by telephone," he said.

Read the latest on Optus' defence statements in the case here.

The competition watchdog, by contrast would "start at a different point on the admissability of the material.

"It's a question of viewing the representation in its form at the time it was made without taking into account things that might or might not have happened to a consumer after," he said.

"You want to know what is the boundary of context?" Justice Perram asked.

"Yes," Williams replied. "It's about an undefined mass of potential consumers who may or may not receive particular publications, who may or may not go to a shop, who may or may not ring up [Optus].

"There's no correlation between people who go to the [Optus] website and who go to the shop. They might be different people."

Optus handed up a number of folders of evidence that included statistics that aggregated the number of visits or "hits" to the Optus retail website.

It was unclear exactly how the carrier planned to use the statistics to argue its case.

Optus barrister Matthew Darke said Optus would claim confidentiality over the statistics, fearing what would happen if they fell into the wrong hands.

"What would [competitors] do if they had it?" Justice Nye Perram asked.

"It would allow them to compare their own website with Optus and they might be able to improve it," Darke said. "It's difficult to say."

Justice Perram said he would wait for a notice of motion concerning the commercial sensitivity of the statistics before formally suppressing them, but said the court would not allow public access to the filings in the meantime.

The court was adjourned to allow Justice Perram to view the online versions of the contested advertisements in Chambers - "a fairly intense exercise", according to barristers from both sides.

Hearings were expected to conclude this afternoon, a day earlier than planned, with neither side expected to read out their written submissions.