The penaties were imposed by the Federal Court following an investigation by the Australian Competition and Consumer Commission (ACCC).
The ACCC said in a statement on Wednesday that Dodo and iPrimus admitted that their ‘typical evening speed’ claims made between March 2018 and April 2019 were misleading because they were not based on an appropriate testing methodology.
“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 said.
The ACCC says that under the Australian Consumer Law, service providers must not make false or misleading representations about the performance characteristics of their services - and representations about future matters are misleading if they are not based on reasonable grounds.
Over recent years, the ACCC says it has worked to facilitate much improved consumer outcomes through its Measuring Broadband Australia Program, the provision of its Broadband Speed Claims guidance, and taking enforcement action against a range of providers.
“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.
The ACCC notes that 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”.
And 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.