Guidelines For Bundled Telecommunications Issued

Fair Trading Act Guidelines For Bundled Telecommunications Products Issued

The Commerce Commission has today issued guidelines to help telecommunications retailers better understand their Fair Trading Act obligations in relation to the disclosure of bundled telecommunications products.

“It has become increasingly common for telecommunications retailers to bundle together two or more products, such as home phone line and internet connection, so that consumers can purchase those products at cheaper prices than what they would pay for the individual products in the bundle,” said Stuart Wallace, Commerce Commission Enforcement Manager, Christchurch.

“While product bundling can lead to cheaper prices and increased competition, the potential danger of bundling is that it can make logical consumer choice more difficult if prices, terms and conditions are not clearly explained. Well informed consumers are essential to drive competition and help ensure that markets operate effectively,” said Mr Wallace.

“If there is a requirement to purchase additional products in order to achieve an advertised price, it is important this requirement is stated as part of the main message, not in the fine print,” said Mr Wallace.

The guidelines can be downloaded from the Commission’s website at www.comcom.govt.nz/telecommunications-product-bundling-guidelines

Background

The Fair Trading Act Only the courts can give an authoritative ruling as to whether conduct breaches the Fair Trading Act and award appropriate penalties. Criminal court action may result in fines of up to $60,000 per offence for an individual and $200,000 per offence for a company. Both a company and the individuals involved in a breach can be prosecuted by the Commerce Commission.

ENDS

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