FEDERAL COURT OF AUSTRALIA
Optus Mobile Pty Ltd v Telstra Corporation Limited [2018] FCA 745
File number: NSD 759 of 2018 Judge: GLEESON J Date of judgment: 23 May 2018 Catchwords: CONSUMER LAW – whether respondent’s advertisements breached Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)) – misleading or deceptive conduct – false or misleading representations – conduct liable to mislead as to nature or characteristics of services – whether advertisements conveyed nothing, merely provoking “wonderment”, or whether ordinary and reasonable consumers would understand word “Unlimited” as connected to words “Australia’s best mobile network” and the respondent’s logo and therefore referable to usage and/or geographic coverage of respondent’s mobile network – whether representations so conveyed false where respondent offers “unlimited” plan relevantly subject to device restrictions and speed throttling once data usage allowance exceeded – contraventions found Legislation: Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)) ss 18, 29, 34 Cases cited: Australian Competition and Consumer Commission v Singtel Optus Pty Ltd [2010] FCA 1177
Australian Competition and Consumer Commission v Singtel Optus Pty Ltd [2011] FCA 87
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640
Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12; (2000) 202 CLR 45
McWilliam’s Wines Pty Ltd v McDonalds System of Australia Pty Ltd [1980] FCA 159; (1980) 49 FLR 455
Medical Benefits Fund of Australia Ltd v Cassidy (2003) 205 ALR 402
Parkdale Custom Built Furniture v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191
REA Group Limited v Fairfax Media Limited [2017] FCA 91
Reckitt Benckiser (Australia) Pty Limited v Procter & Gamble Australia Pty Ltd [2015] FCA 753
Singtel Optus v Telstra [2004] FCA 859
St Lukes Health Insurance v Medical Benefits Fund of Australia Ltd (1995) 17 ATPR 41-428
Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 170; (1982) 42 ALR 177
Telstra Corporation Ltd v Singtel Optus Pty Ltd [2014] VSC 35
Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89
Date of hearing: 18 May 2018 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 111 Counsel for the Applicant: Mr R Lancaster SC with Mr D Roche Solicitor for the Applicant: Clayton Utz Counsel for the Respondent: Mr A McGrath SC with Mr T Sherman Solicitor for the Respondent: King & Wood Mallesons ORDERS
NSD 759 of 2018 BETWEEN: OPTUS MOBILE PTY LTD (ACN 054 365 696)
Applicant
AND: TELSTRA CORPORATION LIMITED (ACN 051 775 556)
Respondent
JUDGE:
GLEESON J
DATE OF ORDER:
23 May 2018
THE COURT DECLARES THAT:
1.By publishing, broadcasting, communicating and/or otherwise distributing advertisements of the kind described in para 26 of the affidavit of Jeremy Anthony Nicholas affirmed 15 May 2018 (“Mr Nicholas’s affidavit”) and advertisements substantially…
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- Case
- [2018] FCA 745
- Decision Date
CaseChat Overview and Summary
The court had to decide if Telstra's advertisements conveyed to ordinary and reasonable consumers that the "Unlimited" plans were truly without limits, or if the term merely evoked a sense of wonderment without any specific reference to the limitations inherent in the plans. This required a careful analysis of how the term "Unlimited" was presented in conjunction with Telstra's branding and logo, and whether it would naturally lead consumers to associate the term with the usage and geographic coverage of Telstra's network.
The court reasoned that Telstra's advertisements did mislead consumers by implying that the "Unlimited" plans offered truly unlimited mobile services, which was not the case due to the imposed restrictions. The court found that Telstra's advertisements breached Australian Consumer Law, as they failed to clearly communicate the limitations associated with the "unlimited" plans. The decision hinged on the conclusion that reasonable consumers would understand the term "Unlimited" as pertaining to the usage and/or geographic coverage of Telstra's mobile network, and that these representations were false in light of the actual plan limitations.
As a result, the court held that Telstra had engaged in misleading and deceptive conduct under the Australian Consumer Law. The orders of the court included listing the proceeding for hearing of the applicant's claims for further relief and directing Telstra to pay the applicant's costs of the proceeding to date. This decision underscored the importance of clear and prominent disclosure of all material terms and conditions associated with advertised services to prevent misleading consumers.
Orders
Orders of the court
8. The proceeding be listed for hearing of the applicant’s claims for further relief.
9. The respondent pay the applicant’s costs of the proceeding to date.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
In cross-examination by Mr Lancaster SC, senior counsel for Optus, Mr Nicholas said that he considered the Telstra Unlimited campaign to be consistent with section 4.2.1 of the Consumer Protections Code. Initially, Mr Nicholas did not accept that the word “unlimited”, used on the digital billboard execution, referred to usage of the mobile network. However, he then gave the following answers to Mr Lancaster SC’s cross-examination:Lancaster:So you think somebody reading the ad will think there’s no association at all between the word unlimited in the context of the ad and the usage that they might wish to make of the mobile network?Nicholas: Usage – sorry, yes. Usage of the network, yes, sorry.Lancaster:Right. So you accept the term unlimited in the Telstra ad refers to usage of the mobile network?Nicholas:It could. It may refer to other things also.Lancaster:Right. If you were to read it, if that was somebody else’s advertisement, would you think it referred to usage among other things?Nicholas:Of the network – of the mobile network?Lancaster: Yes?Nicholas: Yes, it could.Lancaster:If it were you, would you think that it did? You said it could. I want to know if it were you, would you think that it did refer to usage?Nicholas:It – yes, it would refer to usage.Lancaster: Right?Nicholas:It could. The important thing is it could also refer to other things which Telstra provides which aren’t on the mobile network.Lancaster:Right. Okay. So is that explanation that it’s okay to use the word unlimited because it’s truthful from one perspective?Nicholas: Yes.Lancaster:Right. But you accept it’s false from other perspectives?Nicholas:It could be.Lancaster:Well, what do you think? Is it false from other perspectives or could it be false from other perspectives?Nicholas:Yes.Lancaster: It is false from other perspectives?Nicholas: Yes, but it – there are multiple things which are unlimited.ConsiderationRelevant class of consumers Optus submitted, and I did not understand it to be disputed, that the Telstra Unlimited advertisements are directed at members of the Australian public who are considering or may in the future consider acquiring a mobile telephone service or changing their current supplier: cf. Telstra Corporation Ltd v Singtel Optus Pty Ltd [2014] VSC 35 at [20]. See also Optus Think Bigger Plans case at [28]. The hypothetical reasonable consumer within this class can be taken to have some level of familiarity with the sort of plans provided by telecommunication providers, including that they are typically differentiated and advertised on the basis of attributes like price, call and SMS/MMS inclusions, data limits, download/upload speeds and network coverage. As Mr McCarthy said, a customer’s choice of mobile services provider and contract is influenced by factors including the “overall cost of the mobile services, data allowances and transmission (download/upload) speeds offered by a service provider’s mobile network infrastructure”.