Australia fines Telstra $12 million for misleading customers on internet speed

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(Reuters) -Telstra, Australia’s no.1 telecom firm, has been fined A$18 million ($11.87 million) by the Federal Court for lowering internet speed plans for about 9,000 customers without informing them, the country’s competition watchdog said on Friday.

Australian telecom firms are facing heightened scrutiny over governance, particularly after Optus’ two back-to-back emergency call outages last month affected thousands of customers, with the first outage linked to four deaths.

The Australian Competition and Consumer Commission (ACCC) said on Friday that Telstra migrated 8,897 customers of its low-cost value brand, Belong, to a lower-speed plan without notifying them that their maximum upload speed had been halved.

The migration occurred during October-November 2020, the regulator said.

“Telstra’s failure to inform customers that their broadband service had been changed denied them the opportunity to decide whether the changed service was suitable for their needs,” ACCC Commissioner Anna Brakey said in a statement.

In addition to the penalty, Telstra has either already compensated or will compensate all affected customers with a credit or payment of A$15 for each month they were on the lower upload speed plan, the regulator said on Friday.

Telstra has accepted the court’s findings and is completing remediation for one group of customers, a company spokesperson told Reuters in an emailed response.

Telstra shares were trading 0.7% lower, as of 0408 GMT, while the broader benchmark was up 0.5%.

($1 = 1.5161 Australian dollars)

(Reporting by Nikita Maria Jino in Bengaluru; Editing by Subhranshu Sahu)