Federal Court Rules That Telstra’s Unlimited Mobile Ads Are Misleading

Federal Court Rules That Telstra’s Unlimited Mobile Ads Are Misleading
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Last week Optus sought Federal Court orders to force Telstra to cease using the word “unlimited” in advertisements for their $69 per month mobile plan. Yesterday it was ruled that these advertisements constitute as misleading and deceptive.

Telstra introduced a new plan in early May called the ‘Endless Data BYO Plan’. And while this in itself may not seem particularly misleading, some of the advertising around it certainly did.

The telco ran advertisements for the plan using the tagline – ‘One word from Australia’s best mobile network. Unlimited.’

As we reported earlier this month, these plans weren’t technically unlimited. For $69 a month customers are offered unlimited data, however a 1.5Mpbs speed cap would come into affect they went over 40GB.

Optus also took issue with the use of the word “unlimited” and filed the suit on the basis that using it without qualification implied to consumers that there are no limitations on the likes of:

  • The speed at which data can be downloaded
  • The volume of data that can be downloaded at unrestricted speeds
  • The user’s ability to download data without interruption or delay
  • The type of mobile device on which the product or service can be used
  • Geographical coverage

Telstra denied the allegations about the advertisments submitted by Optus, contending that “the word ‘Unlimited’ in the context of the surrounding words and imagery in the advertisements conveys ‘nothing definitive, doing no more than [to] cause a viewer to wonder about its meaning’.”

Ultimately the Federal Court sided with Optus. Justice Gleeson stated that “based on the evidence… I accept that speed cap in the ‘Endless Data BYO Plan’ is a significant limit on usage of the services provided under the plan because the plan does not permit a user to download and upload unlimited volumes of data at unrestricted speeds.”

Speaking to Gizmodo Australia, a spokesperson from Telstra had said that “We will comply with the Federal Court decision, which applies to only a small part of our overall advertising and promotional material for our mobile data plans.

We will carefully consider the judgment before deciding our next steps.”

Details surrounding next steps will be addressed at a later date.

Telstra’s is only one of the slew of “unlimited plans” that have been released by major Australian telcos over the past few months.

Both Vodafone and Optus have released similar plans that, like Telstra, have a 1.5Mbps speed cap once a certain data limit has been reached.

In fact, the marketing for Optus’ original “unleashed” plan was pulled after only 24 hours when questioned over the limits by the Australian Financial Review.

While Optus’ problem with Telstra’s advertising of unlimited data plans is certainly valid (and has been justified by the Federal Court) it’s hard to ignore a level of hypocrisy here.