Unlimited Data or Unlimited Liability? Misleading and Deceptive Claims by Telcos

In a stern warning by the Australian Competition and Consumer Commission (ACCC), telecommunication providers have been put on notice to ensure that their advertising is “clear and transparent”, or otherwise both companies and management that approve misleading advertisements will face proceedings for breach of the Australian Consumer Law (ACL).

A recent action in the Federal Court, and investigations by the ACCC have scrutinised claims that mobile data services are “unlimited” where they are in fact subject to speed caps for particular uses, after a data threshold is reached or during high congestion periods. While some of these advertisements included disclaimers, the ACCC considered that they were not given sufficient prominence and/or did not clearly explain the applicable limitations.

With significantly higher maximum financial penalties for breach of the ACL now in effect (for more information see our previous update), this comes as a timely reminder for businesses to ensure that:

  • absolute claims like “unlimited” are not used in advertising unless they are true, accurate and can be substantiated or if necessary, are adequately disclaimed;
  • disclaimers are prominently displayed and clearly explain the implications of conditions that apply to a product or service offering; and
  • management is aware of personal liability that can be incurred for authorising false, misleading or deceptive advertising.

This post was co-authored by Alexandra de Zwart, Valiant Warzecha, Jessie Buchan and Melinda Upton.