Telstra Fined $18 Million for Misleading Broadband Customers
Australian telecommunications giant Telstra has been penalized with an $18 million fine by the Federal Court for misleading nearly 9000 broadband customers. The court found that Telstra quietly reduced internet upload speeds for its customers in 2020 without proper notification, impacting their service experience.
The Upload Speed Downgrade
Between October and November 2020, Telstra's budget brand, Belong, shifted customers from a service that offered upload speeds of up to 40 megabits per second (Mbps) to a service capped at 20Mbps. While download speeds remained unchanged at 100Mbps, Telstra failed to inform the affected users about the significant downgrade in upload speed.
ACCC's Response and Remediation Program
ACCC Commissioner Anna Brakey stated, "The $18 million penalty sends a strong message to all businesses that they cannot mislead consumers by making changes to key aspects of a service without informing customers." As part of a court-enforceable remediation program, Telstra will reimburse affected customers $15 for each month they were on the slower plan, totaling more than $2.3 million.
Impact on Consumers and ACCC Enforcement
Anna Brakey emphasized that Telstra’s action denied customers the opportunity to assess whether the altered service continued to meet their needs. She further noted that misleading practices in essential services such as telecommunications remain a high enforcement priority for the ACCC. The court also mandated that Telstra contribute to the consumer watchdog’s legal costs.
