Commission received just one complaint on 2degrees claims before deciding to prosecute
The Commerce Commission received just one complaint over allegedly misleading claims made by 2degrees about its Australian roaming service before deciding to prosecute the company.
The competition watchdog announced on Tuesday that it had filed eight charges against Australian-owned 2degrees for allegedly breaching the Fair Trading Act in relation to claims it made about “free Aussie roaming” on its business mobile plans.
Fair Trading general manager Vanessa Horne said 2degrees’ claims gave the impression customers would have the ability to roam year-round in Australia at no extra cost when in fact the free roaming service was capped at 90 days in a year.
2degrees took steps to “rectify” its marketing claims, removed the 90-day cap and refunded customers who paid roaming charges as a result of it, the commission said. But the commission nevertheless decided to take legal action.
Horne said that describing something as “free” was likely to sway a consumer’s purchasing choice, implying its decision to prosecute was partly based on the impact on competitors.
The number of enquiries the commission received was only one of many considerations the commission made when deciding what to investigate, she said.
“In considering whether to investigate an issue, the commission applies discretion over a wide range of matters.
“This includes the potential for consumer harm to result from the conduct, the scale of potential harm, availability of resourcing, and assessments of the comparative priority of the various cases in which the commission is involved.”
2degrees chief executive Mark Callander voiced no complaint about the decision to prosecute, saying it was the commission’s decision.
“We just deal with what’s in front of us.” Some lawyers have privately criticised the commission for opting to prosecute “easy” cases, such as alleged Fair Trading
Act breaches, at the expense of advancing more challenging enforcement actions that could move the dial on competition.
Stuff has been aware of the same concerns existing within the commission.
Commerce Minister Andrew Bayly, when in opposition last year, queried the time it had taken on a Commerce Act investigation into Foodstuffs and Woolworths’ supermarket covenants that was “prioritised” for action two years ago.
Commerce Commission chairperson John Small said in March it managed its litigation fund very carefully and was “now in a position where we’re bumping up against the limits of our litigation fund”.
But he said the public could expect to see more litigation “and litigation against powerful opponents”.
“Watch this space over the next couple of months,” he said then.
Recent ComCom prosecutions
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May 7: Eight charges under the Fair Trading Act filed against 2degrees for alleged misleading claims about its “free Aussie roaming” business mobile plans. April 18: Proceedings filed under Commerce Act against industrial cleaning company Canterbury Industrial Scrubbing for allegedly engaging in cartel conduct with a competitor to allocate customers.
April 16: Proceedings filed against One NZ for alleged multiple breaches of the 111 Contact Code.
April 10: Seven charges under the Fair Trading Act filed against Beau Ideal, formerly trading as Beaurepaires, for allegedly selling non-compliant extended warranties without customers’ knowledge or consent.