The Australian Federal Court has ordered Dodo and iPrimus to pay $2.5 million in penalties for making misleading claims about their broadband speeds, following an investigation carried out by the Australian Competition and Consumer Commission (ACCC).
Both companies are part of the Vocus Group, the fourth-largest telco in Australia, and Dodo has been ordered to pay $1.5 million (£819,942) while iPrimus was fined $1 million (£546,628).
The two companies admitted that their "typical evening speed" claims made between March 2018 and April 2019 were misleading as they were not based on an appropriate testing methodology.
"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.
Sims outlined that the methodology the Vocus Group used as the basis for its speed claims "cherry-picked only the fastest speeds its network could deliver" while ignoring the slower speeds many customers experienced. This meant, he stated, that consumers could not accurately compare different offerings and make an informed choice about their broadband provider.
"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," said Sims.
When considering the appropriate penalties to be imposed, Justice Murphy underlined that through their parent company Vocus, its two subsidiaries "chose not to adopt the methodology proposed as industry best practice by the ACCC and instead developed and applied the Vocus Methodology, which as it eventuated had a number of deficiencies".
Last month, the ACCC, in an "unusual step", asked for permission to appear at the hearing of Epic Games' appeal to the Full Federal Court against a prior decision to stay Epic's proceedings against Apple. The organisation wants to make submissions to the Full Court on the public policy in favour of disputes involving Australia's competition laws being heard and determined by the Australian courts.
