Australian Competition and Consumer Commission chairman Graeme Samuel said he was concerned that ISPs were making claims in advertising about download speeds not achievable outside of a laboratory environment.
“The ACCC is concerned that ISPs are using 'hypothetical' speeds when these speeds are just that – available to the hypothetical consumer not necessarily the real world consumer,” Mr Samuel said.
“At the ACCC, we are concerned about the real-world consumer.”
The ACCC has published an information paper “to assist ISPs comply with the Trade Practices Act”.
Though the information paper is technology neutral and is directed at all broadband service providers, it focuses primarily on ADSL2+ services as it is not as well understood by consumers.
The paper draws attention to the industry practice of using hypothetical speeds as the basis of speed claims in advertising when such speeds are unlikely to be achieved in the real world.
The ACCC has warned ISPs that they should have a reasonable basis – such as real world network trials – for any claims they make in advertising.
“The paper focuses on ADSL2+ because consumers may be attracted to these services by speed claims,” Mr Samuel said.
“As a new technology, consumers usually have less information than the provider of the service and may be misled by headline claims of hypothetical maximum speeds,” he said.
The paper outlines penalties available to the ACCC for conduct it believes breaches the misleading and deceptive conduct provisions of the Trade Practices Act.
Penalties include corrective advertising, injunctions to prevent the prohibited conduct, and fines up to $1.1 million for companies and $220,000 for individuals.
The ACCC monitors advertising by ISPs, and will continue to closely monitor advertising of internet speeds to ensure that high-speed broadband services are appropriately qualified.
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