Dodo and iPrimus fined a combined $2.5m for misleading claims
The Federal Court has ordered Dodo Services (Dodo) to pay $1.5 million and Primus Telecommunications Services (iPrimus) to pay $1 million in penalties for making misleading claims about respective NBN broadband speeds. Dodo and iPrimus are both part of the Vocus Group.
The judgement comes after the Australian Competition and Consumer Commission (ACCC) initiated proceedings against Dodo and iPrimus on 22 June 2020.
Dodo and iPrimus conceded that ‘typical evening speed’ claims made between March 2018 and April 2019 were misleading because they were not based on an appropriate testing methodology. A campaign for Dodo by Deloitte Creative Brand and Media was released in August 2018, telling customers that Dodo is “not as stupid as we look” while selling special NBN pricing offers.
The ad conveyed the notion that Dodo internet is cheap enough to enable consumers to spend their money on internet purchases, instead of on their internet service.
Creative work from the 2018 campaign
“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,” Sims added.
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,” Sims said.
When considering the penalties to be imposed, Justice Murphy said that through 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.
Vocus is the fourth largest telecommunications operator in Australia, with 5.2% overall market share of consumer NBN services, and 436,000 retail broadband customers.
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Olivia Kruimel is the managing editor at Mumbrella. She has more than 15 years of experience in journalism, communications and marketing. Her journalism career began at Fairfax Media (now part of Nine) and includes various B2B publications such as B&T, Travel Today and ALB. As a marketer Olivia has worked for Standard Chartered and various global law firms.
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