Telstra loses appeal over misleading marketing fight with Optus
Telstra has been rebuffed by the Victorian courts in its attempt to overturn last year’s ruling which found Optus had not breached consumer law in its End of Empires campaign.
Optus’ victory in the Victorian Court of Appeal over its campaign is the latest legal setback for Telstra as the two companies battle for share in the stagnant telco market.
In the latest judgement, handed down by the Victorian Court of Appeal, Justices Ferguson, Whelan and McLeish refused Telstra’s application to appeal against last May’s ruling that found Optus had not breached the Australian Consumer Law in its End of Empires campaign.
Optus’ out-of-home and online campaign, created by its inhouse Yes Agency featured a Telstra phone box lying ruined in the desert with the headline: “Empires end. That’s what they do”, followed by a claim “The Optus Mobile Network has been ranked best overall in voice and data.”
Telstra won a court injunction in early May 2018 preventing Optus from showing the ad, claiming it misrepresented the state of the two companies’ mobile networks. However Justice Robson of the Victorian Supreme Court lifted the injunction later that month and dismissed Telstra’s claim.
In its appeal, Telstra claimed the judge erred in not fully considering the damage caused to its reputation by Optus’ campaign and had not allowed for the nuances in the advertising and overall impression of the campaign.
But the judges rejected all of Telstra’s claims, writing: “None of the proposed grounds has any real prospect of success. Leave to appeal must be refused.”
In a statement to Mumbrella, a Telstra spokesperson said: “We are disappointed with the decision. We have Australia’s best mobile network and we connect millions more Australians than anyone else. The P3 and Systemics reports in December 2018 week both ranked Telstra as Australia’s best mobile operator.”
A report in early 2017 by telco industry analyst P3 had ranked Optus’ networks superior to Telsta’s, however subsequent reports by the company have seen Telstra take back the lead after a change to the methodology.
An Optus spokesperson told Mumbrella: “We’re very pleased with the outcome because we believe Australians should know Optus offers a real alternative. We have an award-winning premium mobile network that delivers great value for customers plus exclusive must-have sports and entertainment content.
“Optus will continue to invest and compete for customers with a national, premium quality network that continues to improve and expand.”
During the past year, the courts also ruled against Telstra over its advertising of ‘endless data’ plans which were billed as the “first smartphone plan with unlimited data.”
The plans did allow ‘unlimited’ data downloads, but beyond a certain point streams were slowed, although Telstra claimed it would still be fast enough allow customers to stream video in standard definition, listen to music, browse the web and access social media.
Justice Gleeson of the Federal Court agreed with Optus that the describing the plans as ‘unlimited’ was misleading and banned Telstra from marketing the ‘unlimited’ plans for three years.
Potentially misleading advertising by communications companies has caught the attention of the Australian Competition and Consumer Commission over the past year with the regulator warning telcos they are ‘on notice’ with regards to any false or misleading advertising.
In its September statement, the regulator foreshadowed telcos will be subject to much higher penalties for future breaches, and that executives who knowingly approve misleading advertisements may have court proceedings brought against them.
Last August the ACCC slammed internet providers’ NBN marketing efforts with commissioner Rod Sims describing advertising as “poor” and “unacceptable” following both Telstra and Optus giving refunds to consumers following complaints about performance.
Ove the past year the ACCC has prosecuted internet provider Activ8 Me, along with MyRepublic, which paid $25,200 in penalties, and TPG Internet, which was ordered to repay 8,000 customers over misleading marketing last year.
Seriously? It’s a *great* ad, but pretty misleading when you’ve lost that same benchmark (and others) multiple times since.
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