Australian Competition and Consumer Commission v Telstra Corporation Limited

The Australian Competition and Consumer Commission (ACCC) brought proceedings against Telstra Corporation Limited, alleging that Telstra contravened s 21 of the Australian Consumer Law (ACL) through the conduct of its sales staff at various licensed stores. The contraventions involved entering into contracts with 108 Indigenous Australian consumers from regional and remote communities, who were subjected to exploitative sales practices. Telstra admitted to the contraventions and the matter was resolved by consent. The court had to decide on the appropriate pecuniary penalty and declaratory relief to be awarded.

The legal issues before the court were the appropriateness of the agreed pecuniary penalty and the need for any additional relief, such as declarations. In determining the appropriate penalty, the court considered several factors, including the seriousness of the contraventions, the culpability of Telstra, and the need for deterrence and punishment. The court also examined the impact of the contraventions on the affected consumers, who were from vulnerable groups with limited financial literacy and language barriers. The court awarded declaratory relief as sought by the parties and a pecuniary penalty of $50 million, which reflected the gravity of the conduct.

In delivering the judgment, Mortimer J noted that Telstra's conduct was egregious, involving systematic exploitation of vulnerable consumers. The court emphasised the need for effective systems and processes to prevent such conduct in the future. The penalty was intended to serve as a deterrent and to reflect the seriousness of the contraventions. The court also highlighted the importance of ensuring that Telstra implemented appropriate measures to protect vulnerable consumers, including providing cultural awareness training and improving communication of contract terms. The court made the orders as agreed by the parties, including the payment of the penalty and costs.

The orders of the court included a declaration that Telstra's conduct was unconscionable and in breach of the ACL, along with the payment of a $50 million penalty and the costs of the proceeding. The court also ordered that a copy of the reasons for judgment be retained on the court file for the purposes of s 137H(3) of the Competition and Consumer Act 2010.