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Telecommunications industry

Telecom Agrees to More Candid Advertising Practices

Strategic Insights

— 1 min read

The Trade Practices Commission has reached a settlement with Telecom, a former Australian monopoly carrier, to improve the company's use of comparative advertising for long-distance call deals. As a result of the settlement, Telecom has agreed to clearly disclose access fees for services and other material conditions, as well as inform readers where further details may be obtained. This move comes after a long-running action by the commission, which began in December 1992, following advertisements from Telecom that compared its rates with those of competitors such as Optus Communications.

Key Takeaways:

  • Telecom has agreed to a court order requiring comparative advertisements for long-distance rates to compare like services and clearly disclose any access fees for flexible plans and other material conditions.
  • The company must also inform readers where further details may be obtained.
  • This settlement marks the end of a long-running action by the Trade Practices Commission, which began in December 1992, following advertisements from Telecom that compared its rates with those of competitors such as Optus Communications.
  • As part of the agreement, Telecom has hired a trade practices specialist to vet its advertising to avoid the provisions of the Trade Practices Act covering misleading and deceptive conduct.
  • Telecom has upgraded its activities to ensure absolute compliance with the Trade Practices Act after Professor Allan Fels, chairman of the Trade Practices Commission, acknowledged the company's efforts.
  • Professor Fels also praised Telecom for taking its responsibilities under the Trade Practices Act seriously.

Statistics:

  • Telecom agreed to pay $1889 in refunds to 25 small businesses that were mistakenly invoiced for unauthorized advertising.
  • The company also agreed to pay the commission's legal costs.
  • The Trade Practices Commission received invoices, notices of demand, and letters threatening legal action for recovery of debt from 25 small businesses.
  • The commission had sought court orders after 25 small businesses received unauthorized advertising invoices from Hilton Publications Pty Ltd and a director, Mr. Alexander McKenzie.

Sources:

  • "Telecom Agrees to Order to Improve Advertising" (No date provided)
  • Trade Practices Commission (Source not explicitly provided)

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