3G Advertising Controlled

Hutchison 3G Australia has given court-enforceable undertakings to the Australian Competition and Consumer Commission to resolve the ACCC's concerns over Hutchison advertisements and promotional aspects of its mobile phone deals.

"The ACCC's concerns related to two separate representations", ACCC Chairman, Mr Graeme Samuel, said today. "The first related to the variation of the AU$99 Talk Cap and Free 10 offer by Hutchison, and the second to the advertising and promotion of a handset upgrade offer".

In August 2003, Hutchison introduced the Rate Guarantee which provided that the rate offered on certain rate plans would not be increased for two years from the date the customer connected to one of the plans. In June 2004, Hutchison varied the fair use policy relating to the AU$99 Talk Cap and introduced a fair use limit for the Free 10 offer.

"The ACCC believes representations made by Hutchison that its rates or prices were guaranteed for two years, when Hutchison subsequently varied its fair use policy and imposed a fair use limit, may have contravened the consumer protection provisions of the Trade Practices Act 1974".

In July 2004 in relation to the handset upgrade offer, Hutchison sent a letter to approximately 10,900 Hutchison customers offering those customers an upgrade to a new LG U8110 mobile telephone. The letter stated in part that customers were able to use their pre-existing $300 handset upgrade credit to "upgrade to the new LG U8110 right now, free of charge - even if you haven't been with us for 12 months".

The ACCC received complaints from consumers, who had contacted Hutchison to take up the upgrade free of charge offer, but who were in fact required by Hutchison to pay approximately $160 in addition to redeeming the $300 handset upgrade credit.

In the ACCC's view, the representations made by Hutchison that its offer was free when there was a charge associated for customers wishing to avail themselves of the offer may have contravened the Act.

"This matter again highlights that businesses need to be careful when they use absolute terms in their advertising", Mr Samuel warned. "An offer of free, complimentary or bonus goods or services means exactly that, and businesses need to exercise caution when making absolute claims of this nature"."

Posted to the site on 28th December 2004