Australia’s leading telecom company, Telstra, has been fined A$18 million ($11.87 million) by the Federal Court for reducing internet speeds for nearly 9,000 customers without informing them, the country’s competition watchdog said on Friday.
The Australian Competition and Consumer Commission (ACCC) revealed that Telstra migrated 8,897 customers of its budget brand, Belong, to lower-speed plans during October and November 2020. The change halved the maximum upload speeds, but customers were not notified.
“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 affected customers with a credit or payment of A$15 for each month they were on the reduced speed plan, the regulator said.
A Telstra spokesperson confirmed that the company has accepted the court’s findings and is completing remediation for the affected customers.
The fine comes amid heightened scrutiny of Australian telecom companies following Optus’ consecutive emergency call outages last month, which affected thousands of users and were linked to four deaths.
Telstra shares were trading 0.7 percent lower as of 0408 GMT, while the broader benchmark index was up 0.5 percent.
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