The Federal Court of Australia has found that Telstra made false or misleading representations about the upload speeds of broadband internet services provided to nearly 9,000 customers of its Belong brand. This ruling follows legal action initiated by the Australian Competition and Consumer Commission (ACCC).

In late 2020, Telstra migrated 8,897 customers from a Belong NBN plan that offered a maximum upload speed of 40 megabits per second (Mbps) to a new service with a maximum upload speed of only 20 Mbps. However, Telstra failed to inform these customers about the reduction in service quality, which deprived them of the opportunity to assess whether the new service met their needs.

Despite the downgrade in service, Telstra did not reduce the prices charged to customers, even though the cost from NBN Co to Telstra was $7 less per month for the lower-speed service. The ACCC highlighted that Telstra had misrepresented the service to 2,785 customers who had signed up for the 40 Mbps plan between May 2017 and September 2018, as they were led to believe they were receiving a service with a maximum upload speed of 40 Mbps.

Furthermore, the Court found that an additional 6,112 customers who acquired the same plan between September 2018 and October 2020 were also misled, as they would have reasonably assumed that their service remained unchanged in all significant aspects, including upload speed. The ACCC's Commissioner, Liza Carver, emphasized the unacceptability of misleading consumers, especially regarding essential services.

In response to the situation, Telstra acknowledged its failure in 2021 and provided a one-time credit of $90 to affected customers. The ACCC is now seeking declarations, penalties, and consumer redress, with the Court set to determine the penalties and compensation in a future hearing.

Telstra, as Australia's largest telecommunications provider, has faced previous legal challenges from the ACCC, including a case in 2021 that resulted in a $15 million penalty for misleading representations regarding NBN plans.