One NZ, formerly Vodafone, has been slapped with the largest fine ever imposed under the Fair Trading Act - $3.6 million - for misleading customers over its promotion of a broadband service.

One NZ was prosecuted by the Commerce Commission and found guilty in 2021 for misleading consumers into believing its FibreX service was fibre-to-the-home broadband, when it was not. The final part of the service to the consumer was through a copper cable.

It was also found guilty of falsely suggesting to consumers that FibreX was the only available broadband service at their address, which was not true.

Last year, the Auckland District Court imposed a fine of $2.25 million for 18 representative charges of misleading conduct under the Fair Trading Act.

One NZ appealed against the convictions and sentence to the High Court, and the Commerce Commission cross-appealed, saying the sentence was inadequate.

The High Court has agreed with the Commerce Commission, increasing the total fine to $3.675 million.

Commission Chair, John Small, said the penalty is the highest ever handed down by a court under the Fair Trading Act, and this would serve as “a strong deterrent” to other large businesses.

“This judgment against One NZ is a significant win for Kiwi consumers – because every New Zealander should be able to trust what businesses are saying in their marketing and promotion of their services,” he said.

“The Fair Trading Act requires claims to be truthful and accurate in order to give you the information you need to make an informed purchasing decision. In this case, One NZ’s conduct was misleading and, in addition to the consumer harm, it distorted competition for the supply of broadband services in New Zealand.”

One NZ spokesperson Conor Roberts noted the fine related 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.”

Ric Stevens spent many years working for the former New Zealand Press Association news agency, including as a political reporter at Parliament, before holding senior positions at various daily newspapers. He joined NZME’s Open Justice team in 2022 and is based in Hawke’s Bay.