iiNet pays penalty for ad breach
iiNet has paid $204,000 in penalties for failing to prominently state in an advertisement the total minimum price of its Naked Broadband 250GB service.
The infringement notices were issued because the Australian Competition and Consumer Commission (ACCC) had reasonable grounds to believe that iiNet's advertisements contravened the Australian Consumer Law (ACL).
iiNet's advertisements appeared on a tram and billboard in Melbourne in November 2014.
The advertisements displayed a monthly price of $69.95 for iiNet's Naked Broadband 250GB Plan.
The total minimum price was included in the advertisement but the ACCC considered that it was not displayed in a prominent way, as required by the ACL.
ACCC chairman Rod Sims said consumers had to be able to understand the true cost of an advertised product so that they could make informed purchasing decisions.
"Businesses must ensure that when they advertise part of the price of a good or service, the total minimum price is also prominently displayed," he said.
"Prominence means that the total minimum price can be easily seen and strikes the attention of the consumer.
"In assessing whether the total minimum price is prominent, it is important to consider the context in which the advertisement appears - for example if the advertisement is on a moving vehicle, where consumers may only be able to see the advertisement momentarily."
In 2014, Telstra paid a $102,000 penalty for an infringement notice in relation to an iPhone 6 advertisement which the ACCC considered made a false or misleading representation as to the total price payable by consumers.
In 2013, the High Court upheld a decision ordering TPG to pay a $2 million penalty to the ACCC in relation to misleading advertisements. The advertisements gave the impression that consumers could acquire TPG's Unlimited ADSL2+ broadband internet service for $29.99 per month when in fact it could only be acquired with a bundled home telephone line for an additional $30 per month plus start-up costs.
The ACCC can issue an infringement notice where it has reasonable grounds to believe a person or company has contravened certain consumer protection laws.
However the payment of a penalty specified in an infringement notice is not necessarily an admission of a contravention of the ACL.
iiNet shares were up seven cents, or 1.09 per cent, to $6.50 at 7.20am.
