The Commerce Commission is taking Vodafone New Zealand back to court to seek a higher penalty after it misled customers with its broadband advertising campaign.
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The telecommunications company was ordered to pay a record fine of $2.25 million by the District Court in April for breaching the Fair Trading Act with its FibreX advertising campaign, which ran from 2016 to 2018.
Vodafone was found guilty of misleading customers into thinking they were being offered a full fibre-optic broadband service, which it was not, and for incorrectly telling customers that FibreX was the only available service in their area.
Commission chair Anna Rawlings said its appealing the decision in the High Court because it doesn't reflect the seriousness of Vodafone's offending.
"The promotion ... denied consumers the ability to make an informed choice about FibreX or to choose the type of broadband most appropriate to their needs," she said.
The fine handed down also did not reflect the size of Vodafone's financial resources.
"The fines imposed for this type of offending must be significant enough to deter Vodafone and other large businesses from engaging in this type of conduct in the future."
The competition watchdog originally sought a fine of $5.8m.
"We will argue that the District Court did not apply adequate uplift to ensure that the fine sufficiently reflects the offending of a large corporate offender like Vodafone."
It would also ask the High Court to reconsider evidence that was presented in the lower court about the harm consumers suffered because of Vodadone's breaches.
Rawlings said the appeal would also clarify how the Court of Appeal's decision in the 2020 Steel & Tube case was applied in this case.
In a statement Vodafone NZ said it was "very disappointed" by the court's decision and it intends to appeal both the conviction and the fine.
"Our appeal will set out our strong belief that there are several errors with the original conviction decision and that there are aspects of the FibreX judgment that simply misunderstand the services we sell and are not in the best interests of consumers or future competition," a spokesperson said.
Around 250,000 households in Wellington, Kāpiti and Christchurch were targeted by Vodafone's FibreX campaign.
It was not Vodafone's first run in with the competition regulator.
The company has been warned or fined by the commission on eight occasions in the past 11 years.