TPG loses appeal, $2M fine reinstated for misleading ads

The High Court of Australia today reinstated a $2 million penalty against telecommunications service provider TPG relating to misleading advertisements on appeal by the Australian Competition and Consumer Commission (ACCC).

The High Court overturned a decision in April by the Full Bench of the Federal Court to reduce TPG’s fine to $50,000.

At the time, TPG submitted that after a trial judge forced the ISP to terminate an advertising campaign, at a cost of $105,000, the campaign was found not to have infringed against the law. TPG also said it had incurred costs of more than $600,000.

But the High Court said the $2 million penalty ordered by the trial judge was within the appropriate range and should be reinstated, the ACCC said.

The advertisements – which ran between September 2010 and November 2011 – were misleading because they conveyed the impression that TPG’s Unlimited ADSL2+ broadband plan could be purchased for $29.95 per month. But the service could only be purchased for an extra $30 per month plus start-up costs.

The Federal Court erred in finding that the telephone bundling requirement and set-up charges were adequately disclosed and consumers would have known that Internet services were commonly bundled with telephony services, according to the High Court.

“The tendency of TPG’s advertisements to lead consumers into error arose because the advertisements themselves selected some words for emphasis and relegated the balance to relative obscurity,” the High Court said in its judgement.

ACCC chairman Rod Sims said in a statement: “This case is of great significance to the ACCC because it is important that penalties imposed for breaches of the Australian Consumer Law are set at a level that deters future breaches.”

Read: AAPT buy could build TPG’s business market: analyst.