Optus chases Telstra for damages over ‘unlimited’ ads

Telco wants to quantify the potential business it lost as a result of the campaign

Optus is seeking access to a range of Telstra’s business records as it attempts to quantify the potential loss caused to it by an advertising campaign staged by the rival telco that a court has ruled is misleading.

The Telstra ad campaign used the slogan “One word from Australia's best mobile network. Unlimited.”

Optus wants to quantify the loss it suffered with reference to the “business Telstra has won” as a result of the campaign, Declan Roche this morning told the Federal Court, appearing on behalf of Optus. Optus wants to examine whether Telstra won any customers way from Optus or Vodafone, for example.

Optus may also have “lost the chance to compete” for customers newly in the market for a mobile plan, the court heard.

Anthony McGrath SC, appearing for Telstra, said the categories of discovery proposed by Optus involved a “very significant” number of records “that may be kept across the whole of Australia”.

Justice Gleeson set a 20 June deadline for serving the categories of discovery on Telstra, with a case management hearing set for 28 June. The discovery application is likely to be heard in the second half of July, unless both parties are prepared by the time of the case management hearing.

Justice Gleeson found on 23 May that by “publishing, broadcasting, communicating and/or otherwise distributing” the ‘Unlimited’ ads, Telstra had falsely conveyed the impression that it “offers a mobile product or service that is unlimited” with regards to speed of downloads, volume of downloads and “user’s ability to download data without interruption or delay”.

Telstra’s ads also “falsely convey the representation that Telstra’s mobile network provides unlimited geographical coverage throughout Australia”.

“The word ‘unlimited’ is an ordinary English word with a simple meaning,” Justice Gleeson’s ruling states. “Its power to convey meaning explains why its use is regulated by the Telecommunications Consumer Protections Code. The language of the Code suggests that consumers are keenly interested in the possibility of genuinely unlimited use of services such as mobile network services.”

The judge added: “An ordinary reasonable consumer of mobile network services would understand the word ‘unlimited’ in the context of the Telstra advertisements to mean limitless or without limits, at least within the realms of what might be sensibly expected or might be within the control of Telstra. This understanding corresponds with the Macquarie Dictionary definition of ‘unlimited’.”

The Telecommunications Consumer Protection code states that telcos must not “use the term ‘unlimited’ or an equivalent term in an unqualified manner when referring to usage, unless the ordinary use of the service in Australia is genuinely unlimited and not subject to exclusions, including exclusions for various types of calls or usage, or selected parts of the network”.

The judge ruled that Telstra’s advertising campaign had contravened the Australian Consumer Law.

Telstra was ordered to remove the online and billboard ads it had produced for the campaign.

Telstra had argued that the ads were intended to cause “wonderment” and did refer to a particular product or particular service.

Although the ads themselves merely encouraged individuals to make contact with Telstra via a retail store or through its website, the campaign was launched alongside Telstra’s $69 per month “endless data” plan.

That plan does offer unlimited downloads, but only the first 40GB of data per month can be downloaded at full speed. After that the telco caps downloads at 1.5Mbps.

(Vodafone offers a series of similar plans but does not believe it has run afoul of the law with its marketing of them.)

Read more: Optus to tap SMBs’ disruptive power with Sydney Innovation Hub

Optus earlier this week emerged victorious from a second clash with Telstra. Telstra launched action in the Supreme Court of Victoria over its rival’s ad campaign that used the slogan “Empires end. That’s what they do” and stated: “The Optus Mobile Network has been ranked the best overall in voice and data.”

The claim in the ads is based on a mobile benchmark report issued by P3 late last year. Overall P3 gave Optus a score three points higher than Telstra, out of a possible score of 1000.

Telstra argued that the ad implied there had “been a significant and permanent change in the relationship between the Telstra and Optus mobile networks” and that Optus is “now undisputedly operating a better mobile network overall than Telstra.”

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Tags TelstraTelecommunicationsoptus

More about AustraliaMcGrathOptusRocheSupreme Court of VictoriaVodafone

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