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Telstra has paid a penalty of $102,000 in relation to a misleading iPhone 6 advertisement, following the issue of an infringement notice by the Australian Competition and Consumer Commission (ACCC).The A3 advertisement, which appeared in The Age newspaper on 27 September 2014, for Telstra’s iPhone 6 and phone plan bundle prominently displayed the plan cost of $70 per month, the ACCC stated, however consumers were also required to pay an additional $11 per month for the iPhone 6, and the advertisement “only disclosed the additional payment of $11 and the total monthly cost of $81 in fine print”.
The ACCC stated it “considered that Telstra’s advertisement misrepresented the price of the phone and phone plan bundle to consumers”.
“Consumers should be able to understand the true cost of an advertised product so they can make informed purchasing decisions,” ACCC chairman Rod Sims commented.
“Businesses must be careful about using attention-grabbing headline prices to ensure that their advertisements do not mislead consumers about the actual price they will have to pay. This is especially the case for bundled goods and services like phones and plans.”
Sims added that advertising that is clear allows for “consumers to make informed purchasing decisions and improves competition as it gives other businesses the opportunity to compete fairly”.
Meanwhile, a Telstra spokesperson has stated Telstra was surprised to receive the infringement notice, stating “our ads prominently stated the mobile plan cost, the handset cost and the total minimum cost as legally required, and were in line with the way many others in the industry advertise mobile plans with handsets”, with the ad in question “displayed in a full newspaper page so all the text was much larger”.
“We think there is scope for these sorts of issues to be resolved in the future through constructive engagement between industry and the regulator, rather than through the use of formal enforcement mechanisms,” the spokesperson stated.
