One NZ has been fined more than $3 million by the High Court for breaching the Fair Trading Act over the marketing of its FibreX broadband service.
High Court Justice Simon Moore released his judgment on Friday against the business, which was formerly Vodafone NZ. The Commerce Commission took the business to court.
One NZ pleaded guilty in November 2018 to nine representative charges of "misleading conduct" around representations on its website about the availability of its fibre-to-the-home broadband services.
The Commerce Commission said One NZ had misled consumers into believing the FibreX service was fibre-to-the-home broadband when it wasn't. The business had also falsely suggested to consumers FibreX was the only available broadband service at their address which wasn't true, it said.
In April 2021 it was convicted of nine more representative charges of misleading conduct over the branding and advertising of its Hybrid Fibre Coaxial network.
The District Court last year imposed a fine of $2.25 million over the charges. One NZ appealed its convictions over the branding charges and its sentence on all charges. Its appeal was dismissed.
The Commerce Commission appealed against the original fine.
Justice Moore on Friday quashed the $2.25 million fine and imposed one of $3.675 million.
Moore had commented: "In my view a greater uplift is required in order to ensure the penalty 'stings' from Vodafone's perspective and serves as a personal deterrent, particularly given Vodafone's history of non-compliance with the FTA. On the other hand, the fine must retain proportionality to the offending."
Commerce Commission chairman John Small said the fine would serve as a strong deterrent to other large businesses.
"This judgment against One NZ is a significant win for Kiwi consumers — because every New Zealander should be able to trust what businesses are saying in their marketing and promotion of their services," he said.
"The Fair Trading Act requires claims to be truthful and accurate in order to give you the information you need to make an informed purchasing decision.
"In this case, One NZ's conduct was misleading and, in addition to the consumer harm, it distorted competition for the supply of broadband services in New Zealand."
One NZ 'disappointed'
A One NZ spokesperson said: "As we said last year, we are very disappointed with the outcome and respectfully disagree with the Court’s decisions both in its initial conviction, and subsequent dismissal of our appeal. We will consider our response and have no further comment at this time."
In July this year the Commerce Commission asked One NZ to stop its 100 per cent mobile coverage ad campaign as it believes it is misleading and may breach the Fair Trading Act.
The advertising didn't make clear there are limitations to what will be available from One NZ when it links up with Elon Musk's Starlink satellite network, it said.
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