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Vodafone found guilty of misleading conduct over FibreX service

Christian Fernsby |
Vodafone NZ Limited has been found guilty of engaging in conduct that was liable to mislead consumers in relation to its FibreX branded broadband service.

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Topics: VODAFONE   

In a case brought by the Commerce Commission and heard last year, the Auckland District Court ruled on Friday that Vodafone was guilty of nine charges under section 11 of the Fair Trading Act. These related to conduct in Wellington, Kapiti and Christchurch where its FibreX branded service was offered, between 26 October 2016 and 28 March 2018.

Judge Sinclair found Vodafone’s branding and advertising was liable to mislead consumers into thinking that the FibreX branded service was delivered over a fibre-to-the-home network (like those services delivered over the Government-subsidised Ultra-Fast Broadband (UFB) networks), when it was not.

It did this by naming its broadband service “FibreX” and advertising on billboards, radio, in-store, online and in direct marketing, using phrases such as “FibreX is here” or “FibreX has arrived” and beams of light as a background to its visuals.

In fact the advertised network uses fibre optic cable to a street cabinet and coaxial copper cable from there to the home and is referred to as a “hybrid fibre-coaxial” network.

The Commerce Commission argued that the word “fibre” is a generic description of the service “fibre to the home”, where there is an end-to-end fibre connection, and that this was the meaning established in the minds of some consumers in Wellington, Kapiti and Christchurch by the time of Vodafone’s FibreX campaign in October 2016.

Judge Sinclair agreed that fixed line broadband networks are identified in telecommunications markets by the technology used for the last mile to the home/premise, and that in the case of the UFB networks, that is fibre optic cable. She rejected Vodafone’s argument that consumers would understand that FibreX was a “fibre like” network delivering superfast reliable broadband but not pure fibre, due to the ‘X’ in its name.

Commerce Commission Chair Anna Rawlings said this case reinforces the importance of clear marketing to consumers, including in the name of a product.

Vodafone is due to be sentenced later this year.

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