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iiNet fined for fine print in broadband advertising

Australia's competition watchdog has handed down a AU$204,000 penalty to iiNet for outdoor advertising that it says failed to prominently show the true cost of one of its broadband plans.

An image of iiNet's advertising showing the fine print on plan pricing. ACCC

iiNet has been hit with a AU$204,000 fine from Australia's consumer regulator for advertising its Naked Broadband 250GB Plan without properly displaying the full cost to customers.

The Australian Competition and Consumer Commission issued two notices to iiNet for advertisements that appeared on a tram and billboard in Melbourne last year. Both ads showed the monthly cost for the Naked Broadband plan, but the ACCC deemed that the total minimum price for the plan "was not displayed in a prominent way" and therefore breached Australian Consumer Law.

Speaking about the penalties paid by iiNet, ACCC Chairman Rod Sims said its important for consumers to be able to understand the "true cost" of advertised products so they can make informed purchasing decisions.

"Businesses must ensure that when they advertise part of the price of a good or service, the total minimum price is also prominently displayed," he said.

"Prominence means that the total minimum price can be easily seen and strikes the attention of the consumer. In assessing whether the total minimum price is prominent, it is important to consider the context in which the advertisement appears -- for example if the advertisement is on a moving vehicle, where consumers may only be able to see the advertisement momentarily."

iiNet has paid the fine, thought the ACCC noted that this was not an admission of breaching the ACL.

The penalty follows similar action against Telstra, which was issued a AU$102,000 penalty in 2014 for a misleading iPhone advertisement. TPG also met with the force of the ACCC in 2013 when the High Court upheld a decision to hand down a AU$2 million penalty for misleading broadband advertising.