ACCC takes aim at mobile internet
The ACCC has announced the launch of an Information Paper entitled “Mobile and Other Wireless Internet Speed Claims and the Trade Practices Act 1974″.
The Information Paper has been developed to assist ISPs and Telcos in ensuring that their advertising for mobile and wireless internet is compliant with the Trade Practices Act 1974, and in particular the consumer protection provisions such as s52.
In launching the Information Paper, ACCC Chairman, Graeme Samuel said that:
“The ACCC is concerned by companies over-promising and under-delivering the speeds available on mobile and wireless internet, particularly in the context of network upgrades and increasing wireless internet subscriptions,” “This Information Paper is intended to assist the whole industry – mobile and wireless internet retailers, resellers, and network owners – to comply with the law.”
The ACCC has warned ISPs/Telcos not to advertise terms such as ‘maximum’, ‘up to’ or ‘peak network’ speeds, “if those speeds are not generally achievable or likely to be achieved by consumers using the network.”. The ACCC warning indicates that it is taking a similar approach to that previously taken with ADSL2+ advertising.
The ACCC has expressed the view that ISPs/Telcos should:
- only make speed claims based on ‘appropriate tests of network performance’ to show speeds that can generally be achieved; and
- prominently state the factors affecting mobile and wireless internet speeds such as congestion, location, and other variables.
The Information Paper also contains an Industry Checklist to assist with compliance – ISPs/Telcos are reminded that they should also remember to ensure compliance with CommsAlliance Code C628:2007 TCP Code (Prices Terms and Conditions). Significant effort must be applied in light of the ACCC’s warnings and recent actions in securing enforceable undertakings against some of Australia’s largest ISP/Telcos.
ACCC executes perfect hit on Telstra, Optus and Vodafone
After months of secret negotiations, Telstra, Optus & Voda have rolled over and ‘offered’ ACCC a court enforceable undertaking … equivalent to court injunctions … to stamp out false advertising in the broadband and telephony industry.
When legal advisers warn second and third tier telcos and ISPs about advertising content, the single most common retort is ‘Telstra gets away with it’ and ‘We saw an Optus ad like that’ and ‘But Voda says the same thing’.
It’s a pretty good argument. If the giants can do it, why can’t we ?
No mistake, this is the biggest telco-truth-in-advertising hit ever landed by the national regulator. Like all good commando raids, it seemed to come from nowhere. Only yesterday morning did rumours start to circulate that ‘something big’ was coming out of Canberra in the next 24 hours.
If Tiers 2, 3 & 4 don’t get their act together now, they can’t complain they’re being picked on. And ACCC has made sure that Telstra, Optus & Voda are motivated to keep their networks honest.
Spot Check: Are your price reduction ads putting you at risk?
NEW mobile phone!! WAS $399 NOW $199!!
BRAND NEW phone!! $199 – SAVE over 50%!!
Ads that show ‘two price’ or ‘was / now’ pricing are common, effective and legal … provided they’re not misleading. There are special rules about how to get ‘was / now” pricing ads right. While care needs to be taken, getting it right is relatively easy.
Getting it wrong can be costly, as the former owners of the Zamel’s jewellery chain have found – the ACCC took them to court over allegedly misleading ‘was / now’ price ads in one of their catalogues. In January 2009, the court handed down a fine of $380,000.
ACCC hauls Optus into Federal Court
In the latest action in its war on trade practices non-compliance in the telco sector, ACCC has taken Federal Court action against a wholly owned subsidiary of Optus Mobile Pty Ltd.
Prepaid Services Pty Ltd supplies phone cards that are resold by an independent company Boost Tel Pty Ltd.
ACCC alleges that Prepaid and Boost were involved in false advertising.
National consumer law Bill hits Parliament
On 24 June 2009, the Government introduced the Australian Consumer Law Bill into Parliament. It represents the biggest shake up of Australian consumer law in a long time.
From 1 January 2010, the Government intends that we’ll have a national unfair contract terms law. ACCC will have power to demand that advertisers positively substantiate any claims they make. And there’ll be new penalties, enforcement powers and options for compensating consumers.
Stay tuned to CSP Central for plenty of news and expert commentary about the new law. We already have some detailed comments on one misconceived part of the drafting.
Links
Component pricing law seminar announced
On 21 July 2009 CSP Central contributors Victor Ng and Peter Moon will be conducting a masterclass in understanding and complying with the new component pricing law.
Victor says that the seminar will explain the law as it applies to ISPs, telcos and other industries. ‘This law applies over almost all retailing in Australia,’ says Victor. ‘So every business needs to be across it.’ Victor and Peter both specialise in plain english explanations, so this will be an ideal chance for business people to learn these important new rules.
Bookings are free but places are limited. There are only so many people who can fit into the Logie-Smith Lanyon board room 
Here’s the seminar flyer.
Australia tolerates currency forging
Amazing headline ? Well, it’s true. Companies … well known companies … are manufacturing bogus Aussie dollars, and Canberra isn’t stopping it.
How is it so ? Simple. Within Australia, the exchange rate is fixed. A dollar in Perth is a dollar in Sydney.
Only the dubious end of the telco sector gets away with saying ‘A dollar is worth whatever we say it is, for the purposes of any given plan.’
3′s ‘Up yours’ to ACCC
Mobile provider 3 is shirt-fronting ACCC in its current ‘Hot Offers’ promotional brochure. Total pricing for 24 month plans throughout the document is buried in a sea of barely readable, light-coloured, small print at the foot of each page.
Under the new component pricing law that kicked in on 25 May, the single buy price of a plan like that must be ‘specified in a prominent way’. If 3′s catalogue goes anywhere near passing that test, the new law is dead.
ACCC really needs to kick off some enforcement action against retailers it considers aren’t complying with section 53C of the Trade Practices Act. It’s hard to expect CSPs to follow the spirit of the component pricing law when their competitors seem to be getting away with feint micro-print.
Why it pays to listen to ACCC warnings
You can’t say the ACCC doesn’t give fair warning.
Back in November 2008 we reported that the ACCC were getting ‘very cranky’ about premium SMS. And in March this year, ACCC supremo, Graeme Samuel, gave a direct warning to the industry about premium SMS.
Well, the ACCC has stuck to its word and launched two separate actions in the Federal Court against AMV Holdings and Clarion Marketing Australia.
TPG gets new law a bit right !
Let’s give credit to TPG. The compliance-challenged comms co doesn’t often set a standard, but after recently breaching the new component pricing law, it has taken a reasonable shot at complying with today’s web site advert.
Sure, its math doesn’t make sense. $20 SIM plus $20 deposit does not equal $52.99. But we know what they mean … it’s the $20 SIM plus the $20 deposit plus the $12.99 for a non-contracted month that adds up to $52.99.
And the total price isn’t super-prominent, but it’s not in micro-print, and it is in a clear area of its own, and it is immediately below the headline pricing, and it’s not a big or cluttered ad, and it is in capitals. ACCC might debate whether it passes the ‘prominence’ test but by TPG’s standards, it’s a good effort.
And you know two crazy things ?