INTERNET service provider TPG has been fined $2 million for misleading advertising.
The Federal Court found TPG failed to prominently specify the minimum charge of a broadband package it advertised around the country. The action was brought by the Australian Competition and Consumer Commission.
TPG's $29.99 Unlimited ADSL2+ campaign was deemed by the Federal Court to be false and misleading because the ADSL2+ plan was only available when purchased with home line rental from TPG at an additional cost of $30 per month.
The Federal Court also found that the earlier advertisements did not prominently specify the minimum charge and were misleading for not disclosing additional up front charges.
In providing reasons for his judgement Justice Bernard Murphy noted "the conduct was seriously misleading and affected a diverse class of users and potential users of broadband services".
He noted TPG understood "there was a risk that its conduct might constitute misleading conduct" and that TPG "should have adopted a more cautious approach".
Justice Murphy considered that a sizeable penalty was "necessary to make it clear to TPG and to the market that the cost of risking a contravention cannot be regarded as merely an
acceptable cost of business".
TPG was fined more than $13,000 in March over its free 500 VoIP minutes offer.
ACCC chairman Rod Sims said the decision should act as warning to telcos and internet providers.
"They cannot continue to take risks in their advertising or they could end up in court and be exposed to substantial penalties," Mr Sims said.
Mr Sims said he remained concerned about a number of elements of telcos' conduct, particularly in relation to proper disclosure.