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Telstra to face penalties for misleading broadband speeds
Telstra will soon be penalised for misleading over 15,000 of its Belong customers about the speed of its internet services.
Naomi Neilson
In a decision handed down by the Federal Court late last week, Telstra was found to have made false or misleading statements to thousands of customers signed up to the “premium” NBN plan with its budget telecommunications company, Belong.
Liza Carver, commissioner of the Australian Competition and Consumer Commission (ACCC), said it was “simply unacceptable” for the telco giant to mislead consumers by reducing quality of service.
“We expect better from the country’s largest retail broadband internet service provider and believe these customers, who ultimately received a service they did not agree to, should be compensated,” Carver said.
ACCC’s case was divided into two “cohorts”, the first concerning 8,897 premium customers who were migrated from a plan that provided for a download speed of 100 megabits per second (Mbps) and a maximum upload speed of 40Mbps to one with a maximum speed of 20Mbps.
Justice Leslie Snaden said the October and November 2020 migration occurred without notice or a price change, despite Belong saving $7 per month for each connection on NBN’s 20Mbps speed tier.
In September 2019, after NBN introduced the 20Mbps speed tier, Belong analysed its premium customers and found that 8,897 of the total 9,038 either “never or rarely” achieved upload speeds in excess of 20Mbps on at least two days in its 42-day monitoring period.
It was not until 2021 that 2,553 customers who signed up to the premium plan before July 2018 were informed of the change. A further 232 customers were advised in October 2023.
These customers were told they would receive a $90 “goodwill credit”, being $15 for each month since the speed tier switch.
Justice Snaden said Belong has not made “equivalent disclosures” to the remaining 6,112 customers who signed up to the premium plan between September 2018 and November 2020.
According to the judgment, this was due to the removal of marketing material that referenced the 40Mbps speed from September 2018.
“Each of the [first cohort] customers had a reasonable expectation that they would be told in advance of any detrimental changes made to the speed capabilities of their plan; and because, by making the changes that it made without any such disclosure, Belong should be understood to have represented something that was false,” Justice Snaden said.
The second cohort related to a further 6,112 premium customers who were “victims of equivalent contraventions”. These customers signed up to the plans between 20 September 2018 and October 2020.
Telstra never stated the maximum speed to these customers, but ACCC argued consumers would have still expected the service “was the same in all material respects, including upload speed, as it had always been”.
Justice Snaden said it did so by marketing the premium plans as it did and continuing to administer them “as though nothing had changed”.
The court will determine the penalty at a later date.
The case is Australian Competition and Consumer Commission v Telstra Limited [2025] FCA 93.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
