The Commerce Commission has filed an appeal in the High Court against a record $2.25 million fine imposed on Vodafone NZ last month.
The competition regulator said while the sentence imposed in the Auckland District Court on April 14 was the largest-ever fine under the Fair Trading Act, it was "manifestly inadequate".
The commission had originally sought a fine of $5.8 million.
Commerce Commission chair Anna Rawlings said the commission will argue the fine did not appropriately reflect the seriousness of the offending, and the size and financial resources of Vodafone.
The commission will also argue that Vodafone’s conduct was wilful, rather than grossly careless, and allowed it to make significant commercial gains.
“The commission sees this case as raising important issues relating to compliance with the Fair Trading Act," Rawlings said.
“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 commission said it saw benefits in clarifying the application to the Vodafone case of the Court of Appeal’s decision in 2020 against Steel & Tube, which set out a framework for sentencing decisions under the Act.
“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,” Rawlings said.
The commission will also ask the High Court to reconsider the evidence presented from individual consumers as to the harm that they suffered as a result of Vodafone’s breaches.
Vodafone was found guilty, following a two-week trial, of conduct liable to mislead consumers into believing that FibreX was a fibre-to-the-home broadband service, when it was not.
Vodafone also pleaded guilty to charges relating to its online address checker, which suggested to consumers that FibreX was the only available broadband service at their address, when that was not true.
“The promotion of Vodafone FibreX denied consumers the ability to make an informed choice about FibreX or to choose the type of broadband most appropriate for their needs,” Rawlings said.
It also impacted competition for the supply of broadband services in New Zealand, the commission said. By misleading consumers into believing FibreX was fibre-to-the-home, Vodafone gave itself an unfair advantage over its competitors who were selling true fibre, including local fibre companies and other retailers.
Around 250,000 households in Wellington, Kapiti and Christchurch were targeted by Vodafone’s FibreX campaign.