Telstra Corporation Limited v Cable & Wireless Optus Limited [2001] FCA 1478

FEDERAL COURT OF AUSTRALIA

Telstra Corporation Limited v Cable & Wireless Optus Limited [2001] FCA 1478

TRADE PRACTICES – misleading or deceptive conduct – interlocutory injunction sought restraining respondent from making representations in relation to mobile telephone services – advertising campaign using words "No Risk Switch" – whether serious question to be tried that advertisement misleading or deceptive – consideration of standard of ordinary or reasonable person – balance of convenience – public interest element. WORDS & PHRASES – no risk

Trade Practices Act 1974 (Cth): s 52, s 53(g)

Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 referred to Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 applied Farquhar v Bottom [1980] 2 NSWLR 381 referred to CRW Pty Ltd v Sneddon (1972) AR (NSW) 17 applied Eighth SRJ Pty Ltd v Merity (NSW SC, unreported, 25 March 1997) referred to Trade Practices Commission v Optus Communications Pty Ltd (1996) 64 FCR 326 applied Vodafone Pty Ltd v Hutchison Telecommunications (Australia) Ltd [2001] FCA 1155 referred to TELSTRA CORPORATION LIMITED v CABLE & WIRELESS OPTUS LIMITED & ORS V 1086 of 2001 GOLDBERG J 19 OCTOBER 2001 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 1086 of 2001

BETWEEN: TELSTRA CORPORATION LIMITED

(ACN 051 775 556)

Applicant

AND: CABLE & WIRELESS OPTUS LIMITED

(ACN 052 833 208)

First Respondent

OPTUS NETWORKS PTY LTD

(ACN 008 570 330)

Second Respondent

OPTUS MOBILE PTY LTD

(ACN 054 365 696)

Third Respondent

JUDGE: GOLDBERG J

DATE: 19 OCTOBER 2001

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The applicant ("Telstra") has applied for an interlocutory injunction restraining the respondents ("Optus") from making certain representations in relation to the mobile telephone services they offer to the public. 2 Telstra owns and operates two mobile telephone networks in Australia which are: · a digital mobile telephone network based on the European developed Global System for Mobile ("GSM") communications standard; · a Code Division Multiple Access ("CDMA") digital mobile network which was introduced in or about 1999 to replace Telstra's analogue mobile telephone network. There are other owners and operators of mobile telephone networks in Australia. Vodafone Pty Ltd and Optus own and operate digital telephone networks based on the GSM standard and Orange (the brand name for Hutchison) owns and operates a digital mobile telephone network based on the CDMA system. Each owner/operator supplies mobile telephone services to end‑user customers and, according to Mr Peter Burr, a Telstra manager, there are currently in excess of nine million consumer telephone connections in use in Australia. Prior to 25 September 2001, if an end‑user customer of one of the mobile telephone providers wanted to change from one provider to another provider the user could not transfer the number used on the former network to the new network. On or about 25 September 2001, mobile number portability ("MNP") was introduced to the mobile telephone networks. MNP enables mobile telephone users to change mobile telephone service providers and retain their existing mobile telephone number. 3 On 23 September 2001, Optus launched a new advertising and promotional campaign in relation to its mobile network which features prominently the words "Optus No Risk Switch". The advertising and promotional campaign has been undertaken by way of newspaper and magazine advertisements, radio and television advertising and point of sale material and brochures at Optus shops and outlets. The campaign is due to run until the end of December 2001. The advertising is promoting a switch to the Optus mobile telephone network and in its initial phase, it featured a box with the words "Optus No Risk Switch" alongside which there appeared the following text: "If you're not convinced within 10 days of switching to Optus that it's a change for the better you're free to leave us – no penalties." In another form, the brochure or newspaper advertisement displayed the "Optus No Risk Switch" box and alongside the text there appeared: "Move your current mobile number to Optus, and if you're not completely happy after 10 days, you can leave us with no penalties." The boxes appeared in the following form: