Hutchison 3G Australia Pty Limited - s.87B undertaking

The ACCC raised concerns with Hutchison in relation to two separate mobile phone deals.

The first matter related to the variation of the $99 Talk Cap and Free 10 offer by Hutchison, and the second matter related to 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 2 years from the date the customer connected to one of the plans. In June 2004, Hutchison varied the fair use policy relating to the $99 Talk Cap and introduced a fair use limit for the Free 10 offer.

Hutchison has given court-enforceable undertakings that it will:

• withdraw and cease use of the term “rate guarantee”, “price guarantee” or similar unless the term is appropriately specified;
• offer specified customers, a call rate discount on all calls exceeding either the original $99 Talk Cap and/or Free 10 offers; and
• strengthen its existing corporate trade practices compliance program to ensure similar potential breaches of the TPA do not occur in the future.

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.”

Hutchison has given court-enforceable undertakings that it will:

• not make representations to consumers in the future to the effect that any offer of specific goods and services is “free of charge” when in fact there is a charge for those goods or services unless the term is appropriately specified; and
• offer affected customers, who accepted the LG U8110 upgrade offer and who have not already been offered or received some form of restitution from Hutchison, and who believe they had been misled about the initial offer, a refund equalling an amount which is the difference between the $300 credit and the actual cost of the mobile phone.