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Dodo & iPrimus pay $2.5m for misleading claims

After an ACCC investigation, the Federal Court ordered Dodo Services to pay $1.5 million and Primus Telecommunications Services to pay $1 million in penalties for making misleading claims about their NBN broadband speeds. Dodo and iPrimus are both part of the Vocus Group.

“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.

“The ACCC brought this case because we were concerned that the methodology which the Vocus Group used as the basis for its speed claims cherry-picked only the fastest speeds its network could deliver, and ignored the slower speeds many of its customers experienced.”

“These misleading speed claims meant consumers could not accurately compare different offerings and make an informed choice about their broadband provider,” Mr Sims said.

Under the Australian Consumer Law, service providers must not make false or misleading representations about the performance characteristics of their services. Representations about future matters are misleading if they are not based on reasonable grounds.

“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,” Mr Sims said.

When considering the appropriate penalties to be imposed, Justice Murphy said that through their parent company Vocus, Dodo and iPrimus “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”. He added: “That is material to the penalties imposed.”

Dodo and iPrimus co-operated with the ACCC’s investigation, admitted liability and agreed to make joint submissions to the Court in relation to penalties and other orders.

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