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Investing.com-- Australia’s Federal Court has found that telecom giant Telstra Group (ASX:TLS) misled nearly 9,000 broadband customers about their internet upload speeds, following legal action by the Australian Competition and Consumer Commission (ACCC), the regulator said on Wednesday.
Between October and November 2020, Telstra downgraded 8,897 Belong customers from a plan with a 40 megabits per second (Mbps) upload speed to 20Mbps without notifying them, despite continuing to charge the same price, according to the competition watchdog.
The switch saved Telstra $7 per customer monthly, based on NBN Co’s wholesale pricing, the ACCC said.
“Telstra’s failure to inform customers that their broadband service had been altered denied them the opportunity to decide whether the changed service was suitable for their needs,” ACCC Commissioner Liza Carver said in a statement.
Telstra shares fell 0.7% to A$4.11 as of 02:19 GMT.
The court found Telstra had misrepresented services to 2,785 customers from 2017 to 2018 and to another 6,112 customers through 2020 by failing to disclose the reduced upload speeds. Telstra acknowledged its misconduct in 2021 and provided a $90 credit to affected users.
Carver called the conduct “unacceptable,” adding that the customers, who ultimately received "a service they did not agree to, should be compensated.”
The ACCC is seeking penalties, consumer redress, and costs, with the court set to decide on penalties at a future date.
This ruling adds to Telstra’s legal woes after it was fined A$15 million in 2021 for similar misleading practices.