ACCC to come down hard on telcos for 2013

Australian Competition and Consumer Commission chairman Rod Sims.

The Australian Competition and Consumer Commission (ACCC) has warned telecommunications companies that it will be making sure Australian consumers “get what they pay for” when they sign up to long-term phone or broadband contracts.

At a Committe for Economic Development of Australia (CEDA) event today in Sydney, ACCC chairman Rod Sims launched the consumer body’s new Compliance and Enforcement Policy, which seeks to emphasise that some forms of conduct are detrimental to consumer welfare. These include cartel conduct, anti-competitive agreements and misuse of market power.

“Our consumer protection priorities, as set out in our new policy are a mix of those from 2012 that require further work and new and emerging concerns,” he said. “These are online consumer issues, telecommunications and consumer guarantees.

“We’re looking at the contract terms when consumers sign up for a telco product and we want to make sure there are no unfair contract terms,” Sims said.

The ACCC is seeking special leave to take internet service provider TPG to the High Court.

The ACCC seeks to appeal the decision of the full bench of the Federal Court, which overturned a Federal Court judgement last year that found a series of TPG advertisements were misleading.

The case relates to TPG advertisements between September 2010 and November 2011 for the ISP’s $29.99 Unlimited ADSL2+ plan, which were found to be misleading by the Federal Court in June 2012.

In 2010, ACCC took action against Optus after it found the company’s unlimited broadband plans to be misleading. It brought Optus before the courts, alleging the telco had failed to properly notify customers that their speed would be throttled to speeds of 256 kilobits per second (Kbps) once they reached their monthly data allowance.

When asked if the ACCC would investigate Telstra’s proposal to introduce speed-based plans for ADSL, Sims said this would depend on if there was clear evidence that the ISP was controlling content on its network.

“If they [Telstra] start slowing down some services and we think they are biased towards slowing down services that compete with them, then we’ll be onto it,” he said. “We’ll be watching but we have no investigation underway.”

Online competition

According to Sims, the ACCC will examine online competition and consumer issues including conduct which may impede emerging competition between online traders or limit the ability of small businesses to effectively compete online.

“For example, this year the work we have already commenced in looking closely at online group buying websites will come to a head,” he said.

“Despite recent inroads from the work of Australian Consumer Law regulators, during the past couple of years there has been a significant increase in complaints about these websites.”

Another new area of complaint that the ACCC plans to investigate during 2013 is fake testimonials and reviews in online retailing.

Sims said that these fake testimonials could mislead consumers and give an unfair advantage to unscrupulous traders.

National Broadband Network

In addition, 2013 will see a “significant focus” by the ACCC on establishing the regulatory framework that will apply to the National Broadband Network (NBN) via its special access undertaking.

“The undertaking will shape the telecommunications industry for decades to come, as NBN Co proposes the undertaking operate until 2040,” he said.

“Submissions to the ACCC have highlighted some concerns with the proposals NBN Co has put forward, particularly around how prices will be adjusted over the life of the undertaking.”

According to Sims, the special access undertaking must be in the long-term interests of end-users.

“In practical terms this might mean, for example, that consumers will be able to get services of the quality they get today, for the price they pay today,” he said.

He added that a draft decision about the special access undertaking will be made by March this year.

However, Sims would not comment further on the decision.

“The NBN is a very complex exercise. When we are at this stage where everyone is saying what their concerns are with what NBN Co is proposing, we’re working our way through it and will come out with a decision,” he said.

Follow Hamish Barwick on Twitter: @HamishBarwick

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