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Commerce Commission v Vodafone NZ Ltd [2022] NZDC 6695

Published 03 November 2022

Sentencing — breaches of Fair Trading Act — misleading advertising — FibreX — fibre to the home — Fair Trading Act 1986, ss 11, 13(g), 40(1)(b) & 40(2) — Sentencing Act 2002, s 24 — Victims Rights Act 2002, ss 4(a)(i), 17AB & 17-19 — R v Proctor [2007] NZCA 289 — Commerce Commission v Vodafone [2021] NZDC 7381 — Commerce Commission v Steel & Tube Holdings Limited [2020] NZCA 549 — Caswell v Powell Duffryn Associated Colleries Limited [1940] AC152 (HL) — Pokai v R [2014] NZCA 356 — R Kinghorn [2014] NZCA 168 — Financial Markets Authority v ANZ Bank NZ Limited [2021] NZHC 399 — Commerce Commission v Reckitt Benekiser (NZ) Ltd [2017] NZDC 1956, [2017] DCR 431 — Commerce Commission v Vodafone [2019] NZDC 15705 — Commerce Commission v Vodafone [2016] NZDC 18137 — Commerce Commission v Vodafone DC Auckland CRI 2012-004- 012339, 10 September 2012 — Commerce Commission v Vodafone NZ Limited [2012] DCR 291 — Commerce Commission v Vodafone DC Auckland CRN 09004505626, 12 August 2011. The defendant appeared for sentence on nine representative charges each of misleading conduct and making misleading representations. The first set of charges arose from the defendant's advertising for its broadband service FibreX. At an earlier hearing the Court had found that the advertising campaign misled consumers into thinking that the defendant was offering a fibre to the home (FTTH) service, when in fact it was offering a hybrid-fibre coaxial (HFC) service. The second set of charges related to claims that the defendant had made on its website about the availability of broadband services, including FTTH. The defendant had falsely claimed that FibreX was the only available broadband service. The defendant had pleaded guilty to those charges on the basis that the claims came from a technical error and were not intentional. Assessing the defendant's culpability, the Court did not accept that the defendant had intended to deceive consumers. However the Court stated that the defendant should have realised that its choice of the name "FibreX" was liable to mislead. Likewise, it had been moderately careless in making the false claims on its website. The defendant had not had an effective compliance structure and seemed to lack commitment to complying with the Fair Trading Act. The offending had harmed consumers, market competition, and local fibre companies. The offending related to broadband services, which are important to New Zealanders, and lasted for some 17 months. The Court did not identify any factors that would mitigate the defendant's culpability, and set a start point for fine of $2,100,000 with a 20 per cent uplift for prior offending. The defendant was allowed a 5 per cent discount for cooperation with the investigation and a 25 per cent discount for guilty pleas on the misleading representation charges. The Court then made an uplift to reflect the defendant's financial resources. The total fine was $2,250,000. Judgment Date: 14 April 2022