The fine relates to marketing by the then-Vodafone from 2016 to 2018. Photo: RNZ / Nate McKinnon
The Commerce Commission says a $3.675 million fine imposed on One NZ for misleading consumers in the marketing of its FibreX broadband should act as a deterrent.
Commission chair John Small said the penalty was the highest ever handed down by a court under the Fair Trading Act.
The commission had appealed against the original $2.25m penalty imposed on the company - then Vodafone - by the District Court in April 2022.
It argued that the sentence was manifestly inadequate and did not appropriately reflect the seriousness of the offending, and the size and financial resources of the business.
The company had been found guilty in 2021 of misleading consumers into believing its FibreX service was fibre-to-the-home broadband when it was not, and of falsely suggesting to consumers that FibreX was the only available broadband service at their address.
The case related to marketing between October 2016 and March 2018 in Wellington, Kāpiti and Christchurch.
"By misleading consumers into believing FibreX was fibre-to-the-home, One NZ distorted competition by giving itself an unfair advantage over its competitors who were selling true 'fibre',
including local fibre companies and other retailers," Small said.
The High Court allowed the commission's appeal and dismissed One NZ's cross-appeal against its conviction on nine of the original charges.
"The whole point about having a fine regime in the Fair Trading Act is that it has to sting - is the words of the court - which means its not just seen as the cost of doing business, it's something that's a real deterrent," he told Morning Report.
"That's why we're happy about this fine being lifted, because it's a general deterrence to all firms, more or less saying that the courts will look at the size of your entity and your financial resources when they calculate a fine."
He said it was a "good outcome" for consumers.
One NZ spokesperson Conor Roberts noted the fine relates to a now discontinued promotion that ran from late 2016 to early 2018 when the business was known as Vodafone.
"We are very disappointed with the outcome and respectfully disagree with the Court's decisions both in its initial conviction, and subsequent dismissal of our appeal. We will consider our response and have no further comment at this time."