Optus cops return to court over alleged NBN disconnection claims

BREAKING NEWS

Optus has acknowledged new legal action by the Australian Competition and Consumer Commission and “admitted its mistake,” after the regulator today instituted proceedings in the Federal Court against the Singtel-owned telco, alleging it misled consumers about the need to move to the NBN or risk being cut off.

According to the ACCC, on 24 May 2018 Optus sent an email offering its NBN broadband services to 138,988 of its mobile customers, advising them that their broadband service would be ‘disconnected very soon’ and encouraging them to ‘make the switch, before it’s too late.’

The ACCC said it alleges this was a false or misleading claim, adding that when the email was sent, Optus knew the recipients of the email were already being provided with NBN-based services by another company, and Optus did not have any reasonable basis for saying they would be disconnected.

0“Optus acknowledges the ACCC’s action today and its mistake,” said the telco’s VP of regulatory and public affairs Andrew Sheridan. “Optus has apologised to customers who received the mistaken communication and offered a costless exit for those who took out the offer.”

The ACCC – which is now seeking declarations, injunctions, pecuniary penalties, compliance orders and costs – also reiterated how on 22 May 2018, following the regulator’s action, the Federal Court ordered Optus pay penalties of $1.5 million for making misleading representations to customers about their transition from the telco’s HFC network to the NBN.

“Moving to the NBN is an important decision for consumers, and it can also be a confusing process,” ACCC Commissioner Sarah Court said today. “The ACCC has had to take action about Optus’ advertising on several previous occasions, and it is concerning that we are again having to take them to court for alleged misleading statements about this issue.”

“We are keeping a close eye on this sector and we will continue to take enforcement action where appropriate,” Court added.

HUAWEI HITS BACK AT US CHARGES

Huawei has expressed its disappointment at thirteen criminal charges brought by the US Department of Justice  against the firm , its CFO Meng Wangzhou, and its affiliates in the United States and Hong Kong.

After Ms. Meng’s arrest, Huawei said it sought an opportunity to discuss the Eastern District of New York investigation with the Justice Department.

“But the request was rejected without explanation.  The allegations in the Western District of Washington trade secret indictment were already the subject of a civil suit that was settled by the parties after a Seattle jury found neither damages nor wilful and malicious conduct on the trade secret claim,” Huawei said.

The firm denied that it or its subsidiary or affiliate have committed any of the asserted violations of US law set forth in each of the indictments. In addition, Huawei said it was not aware of any wrongdoing by Ms. Meng, and added it believes the US courts will ultimately reach the same conclusion.

Motorola wins second German patent infringement suit against Chinese Hytera Comms

Motorola Solutions is flagging the successful outcome of its latest patent infringement lawsuits in Germany against Shenzhen-based Hytera Communications and its German Hytera Mobilfunk division.

“This is the second time this year that a German court has ruled in favor of Motorola Solutions against Hytera Mobilfunk; importantly it also applies to Hytera’s Chinese parent company, Hytera Communications Corporation ,” said Motorola Solutions.

These patent lawsuits took place in the Regional Court of Düsseldorf, Germany, which determined that Hytera’s two-way Digital Mobile Radio (DMR) subscriber radios that use what Hytera refers to as the “pseudo-trunking” functionality in TDMA Direct Mode are infringing Motorola Solutions’ patent EP 2 342 851 B1.

The Regional Court has granted two injunctions against Hytera. The first prevents Hytera from offering the patented method in Germany, and the second injunction prevents Hytera from offering and delivering products capable of performing the patented method in Germany.

Additionally, it has held Hytera liable for damages. While the current judgments may be appealed by Hytera, they are immediately enforceable upon posting of a required security by Motorola Solutions, which is expected to be completed in short order.

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Motorola Solutions Executive V General Counsel and Chief Administrative Officer,

“The Regional Court has ordered remedies that punish Hytera for its illegal conduct and infringement of our intellectual property,” said Mark Hacker, general counsel and chief administrative officer of Motorola Solutions. “Significantly, today’s ruling covers additional Hytera DMR subscribers beyond those that were previously found to infringe our patented squelch technology in an earlier judgment.”

Hacker said Motorola Solutions welcomed legitimate competition. “In fact, we believe that robust, fair competition drives innovation and benefits our customers and our industry as a whole. However, Hytera’s infringement creates an uneven playing field, which ultimately stifles innovation and hurts customers and other end-users,” he added.

“On behalf of our customers, shareholders, employees and other stakeholders, we are committed to defending our proprietary technologies and investments in innovation around the globe,” he said.

This is Motorola Solutions’ second significant victory against Hytera in less than a week. On Nov. 16, the US. International Trade Commission issued a Notice of Final Determination confirming that certain Hytera Communications products infringe four Motorola Solutions U.S patents.

The ITC issued exclusion and cease-and-desist orders for three of Motorola Solutions’ patents, prohibiting Hytera Communications from importing products into the US and selling or marketing those products and rejected Hytera Communications’ request to allow it to import infringing products or components into the US to repair or replace those in the field.

Pending a 60-day presidential review period, the ITC’s exclusion and cease-and-desist orders will take effect on approximately Jan. 15, 2019.

Motorola Solutions’ patent infringement, copyright infringement and trade secret theft lawsuits against Hytera are still pending in the US District Court for the Northern District of Illinois and the Federal Court of Australia.

Richard van der Draay is in Melbourne as a guest of Motorola Solutions

Australian regulator puts telcos on notice on ‘misleading advertising’

The Australian Competition and Consumer Commision has put telecommunications companies on notice to ensure their advertising is clear and transparent.

The telcos may face court action from the regulator, including much higher penalties – with the ACCC warning that it may bring proceedings against executives who knowingly approve misleading advertisements.

Earlier this year the ACCC began investigating Optus, Vodafone and Telstra’s use of the term ‘unlimited’ to promote mobile data plans, concurrent with private litigation brought by Optus against Telstra in the Federal Court.

Between March and June 2018, Optus, Vodafone and Telstra advertised mobile data plans with a headline claim of ‘unlimited’ mobile data, but the services had speed caps imposed on particular uses or after a certain data threshold was reached (among other limitations):

Optus’ ‘unlimited’ plan imposed a 1.5Mbps speed restriction on tethering, streaming and downloads. Heavy data users could also be de-prioritised during congestion.
Vodafone’s ‘unlimited’ plan provided an initial data allowance at usual speeds, after which all usage was speed capped at 1.5Mbps.

Telstra’s ‘unlimited’ plans provided 40GB at usual speeds, after which all usage was slowed to 1.5Mbps and slowed further during busy periods. The headline claims were, in most cases, qualified with disclaimers that were not sufficiently prominent or clear to explain to consumers the existence and impacts of the limitations, in the ACCC’s view.

The Court considered Telstra advertisements with the tagline “One word for Australia’s best mobile network. Unlimited”, and found they were misleading or deceptive in contravention of the Australian Consumer Law.

The Court found they falsely conveyed to consumers that Telstra provided plans offering unlimited usage of its mobile network when in fact its services, including mobile data services, were always subject to use limitations and exclusions.

Following the Federal Court’s findings and the ACCC’s interactions, all three retailers ceased using the headline claim of ‘unlimited’ to advertise their mobile data services.

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ACCC Chair Rod Sims

“Telecommunications companies should be wary of using absolute claims like ‘unlimited’ where that does not give a true picture to consumers of what is being offered,” ACCC Chair Rod Sims said.

“We have taken a range of actions against telecommunication companies for misleading consumers. It is about time they showed more respect for their customers and the Australian Consumer Law,” added Sims.

“With much higher penalties now available for breaches of consumer law, I hope they will take their obligations more seriously,” Sims said. “From now on consumer law penalties will seriously affect their bottom line, and we will not hesitate to seek the highest possible penalties.”

Penalties for contraventions of the ACL increased on 1 September to the greater of A$10 million, three times the value of the benefit received, or where the benefit cannot be calculated, 10 per cent of the annual turnover in the preceding 12 months. Penalties against individuals under the ACL also increased from A$220,000 to A$500,000 per breach.

 

ALP to introduce NBN service guarantee if elected

If elected, a Shorten Labor Government will establish an NBN Service Guarantee to deliver more uptime,  and greater oversight of the national broadband network, according to Michelle Rowland, Shadow Minister for Communications and Member for Greenway.

According to Rowland, the proposed service guarantee will use a raft of new regulatory settings including penalties, to deliver less downtime as well as greater accountability of NBN Co itself, flagging  this as “one of the biggest complaints about the NBN.”

 

OPTUS COPS A$1.5m FINE FOR MISLEADING CUSTOMERS ON NBN TRANSITION

The Australian Federal Court has ordered Optus Internet to pay penalties of A$1.5 million for making misleading representations to customers about their transition from the Singtel-owned company’s HFC network to the National Broadband Network.

According to the Australian Competition and Consumer Commission, during the period from October 2015 to March 2017, Optus notified some 14,000 of its customers that their services would be cut off unless they agreed to move to the NBN.

However,  under the terms of its contract, Optus could not force disconnection within the timeframe it claimed. In addition, Optus made misleading representations to customers that they had to sign up to Optus’ NBN services when they could have chosen any internet service provider.

Optus benefited by around A$750,000 as a result of the conduct, the ACCC said.

“Optus pressured customers by misrepresenting the time period in which services could be disconnected,” added ACCC Chairman Rod Sims. “Businesses should not make false representations which distort customers’ decision making. This is particularly important when many Australians are moving to the NBN for the first time.”

“It is illegal for businesses to mislead their customers and create a false impression through their communications,” continued Sims. “Today’s penalty serves as a warning to all businesses that such behaviour will be met with ACCC action.”

Since the ACCC investigation commenced, Optus has paid A$833,000 in compensation to affected customers for the disconnection of their services.