Appropriate penalties
15 As above, the ACCC brought the action in part for breaches of ss 18 and 29(1)(l) of the ACL. Section 18 provides:
18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2) Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).
Sub-section 29(1)(l) provides:
29 False or misleading representations about goods or services
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
…
(l) make a false or misleading representation concerning the need for any goods or services; or
…
16 The statement of agreed facts contains the following admissions in relation to those sections (at [19]-[21]):
19 For the purposes of this proceeding only, Optus admits that, by making the Representation, Optus engaged in conduct in trade or commerce that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 18 of the ACL.
20 For the purposes of this proceeding only, Optus admits that, by making the Representation, Optus made false or misleading representations that each Recipient's current broadband service would be disconnected within a short period and consequently that the Recipient needed to acquire an NBN based service in the near future in order to continue to receive broadband services, in contravention of section 29(1)(I) of the ACL.
21 For the purposes of this proceeding only, Optus admits that:
(a) the Representation was a representation as to a future matter;
(b) Optus did not have reasonable grounds for making the Representation; and
(c) the Representation is, by virtue of s 4 of the ACL, taken to be misleading within the meaning of sections 18 and 29(1)(l) of the ACL.
17 The parties have agreed certain penalties be imposed under ss 232, 224 and 246 of the ACL, and ss 21 and 43(1) of the FCA Act. The following forms of relief were agreed to be appropriate in this case:
(1) Declarations under s 21 of the FCA Act that Optus had contravened ss 18 and 29(1)(l) of the ACL by the conduct described above (declarations);
(2) Orders under s 224(1)(a)(ii) of the ACL requiring Optus to pay $6.4 million by way of pecuniary penalty (pecuniary penalties);
(3) Orders under ss 232 and 233 of the ACL enjoining Optus for three years from engaging in conduct similar to the above (injunctions); and
(4) Orders under s 246(2)(b) of the ACL requiring Optus to undertake an independent review of its compliance program, for the reviewer to provide a report with recommendations, and to put on affidavit evidence that it has carried out its obligations as such (compliance orders).
18 The proper approach to civil regulatory orders sought on an agreed basis was discussed by the High Court in Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (see a recent consideration of this case in Australian Competition and Consumer Commission v Medibank Private Limited [2020] FCA 1030 at [10]-[15] per Anderson J). In Commonwealth v Director the plurality judgment of French CJ, Kiefel, Bell, Nettle and Gordon JJ stated (at [58]):
… Subject to the court being sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and, for the reasons identified in [Trade Practices Commission v Allied Mills Industries Pty Ltd [1981] FCA 156; 37 ALR 256 at 259 per Sheppard J], highly desirable in practice for the court to accept the parties' proposal and therefore impose the proposed penalty.
(Emphasis added)
19 I will consider each remedy in turn against the High Court's dictum in Commonwealth v Director that such remedy must be 'an appropriate remedy in the circumstances'.
20 It is plain from the facts and admissions stated in the statement of agreed facts that Optus has engaged in the contraventions alleged. It is appropriate the Court's disapproval of such conduct should be recorded by way of declaration of contravention.
21 Pursuant to s 224(1)(a)(ii) of the ACL, if the Court is satisfied a person has contravened a provision of Part 3-1 of the ACL, which relevantly includes s 29, the Court may order that person pay an appropriate penalty. Section 224(2) provides:
In determining the appropriate pecuniary penalty, the court must have regard to all relevant matters including:
(a) the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission; and
(b) the circumstances in which the act or omission took place; and
(c) whether the person has previously been found by a court in proceedings under Chapter 4 or this Part to have engaged in any similar conduct.
22 The parties set out several matters supportive of the pecuniary penalties being appropriate in the present circumstances. I have considered those matters in addition to the factual matrix disclosed by the statement of agreed facts.
23 It has been long accepted that the primary role of civil penalties is to ensure deterrence: ACCC v TPG Internet Pty Ltd (2013) 250 CLR 640, at [65]. The Court should seek to impose a penalty that will deter the offending "…from the cynical calculation involved in weighing up the risk of penalty against the profits to be made from contravention": Singtel Optus Pty Ltd v ACCC [2012] FCAFC 20; 287 ALR 249; (2012) ATPR ¶42-387, at [63]. In the present case specific deterrence is of particular relevance given Optus was fined $1.5 million in ACCC v Optus two days before the Disconnection Email was sent. This is not to say that Optus engaged in a 'cynical calculation'. The statement of agreed facts and the submissions of the parties rebut such an inference. The statement of agreed facts states that of the 138,988 recipients of the Disconnection Email, only 631 acquired a new NBN based service from Optus in the relevant period, and that Optus estimates it did not generate a profit in respect of NBN based services provided to recipients after taking into account its costs of providing those services (at [23]). However, Optus ought reasonably been aware of the deficiencies in their internal compliance program and aware of the misleading nature of the Disconnection Email.
24 The submissions also made reference to the penalties applied in cases similar in some respects to the present: ACCC v AGL South Australia Pty Ltd [2015] FCA 399; 146 ALD 385, ACCC v Origin Energy Limited [2015] FCA 55, ACCC v Valve Corporation (No 7) [2016] FCA 1553, ACCC v MSY Technology Pty Ltd [2017] FCA 1251, ACCC v Optus Mobile Pty Limited [2019] FCA 106, and ACCC v Telstra Corporation Limited [2018] FCA 571; (2018) ATPR ¶42-593. I do not propose to consider and compare the facts in those cases to the present. I note that the penalty I have applied in this case falls in the upper end of the range of what appears appropriate relative to the conduct concerned and the penalties imposed in those cases. It is unnecessary to engage in a granular comparison between the present proceedings and those other similar cases. Such comparisons are apt to be unhelpful at a close specific level as there are invariably factual and circumstantial variations that render a comparison at that level more likely to reveal differences rather than similarities. In my view, it is sufficient for the purposes of ensuring reasonable consistency and proportionality to consider broadly similar cases at a higher level of comparison. I am satisfied that the level of the penalty agreed between the parties is within the range, indeed at the higher end of the range, for broadly similar contraventions involving offending of comparable scale and means.
25 I am also satisfied that the injunctions sought are appropriate remedies. I am fortified in my conclusion that injunctions are justified by the circumstance that Optus has recently been fined for similar conduct as discussed above. Though Optus's offending conduct is not continuing, an order enjoining Optus from engaging in further like conduct for a period of three years carries with it the additional potential sanctions for contempt in the event of later contraventions. Thus potentially there is utility in making those orders.
26 Finally, turning to the compliance orders, it appears evident from the several reviews within Optus of the Disconnection Email, that their compliance process failed to identify its misleading nature. This suggests that Optus's compliance program was deficient. Optus appears to accept as much by consenting to the orders that they conduct an independent review of their compliance program, in effect to be overseen by the ACCC. This too is clearly an appropriate preventative remedy in the circumstances.