Australia’s telecommunications giant faces one of the largest consumer protection penalties this year after a Federal Court ruling exposed how the company quietly stripped broadband services from nearly 9,000 customers without their knowledge.
The Australian Competition and Consumer Commission (ACCC) secured the $18 million fine against Telstra, following a three-year legal battle that began when customers complained about unexplained performance issues with their home internet.
Telstra has been ordered by the Federal Court to pay a penalty of $18 million for breaching the Australian Consumer Law after it moved almost 9,000 Belong customers to a lower speed plan without telling them. https://t.co/YVCqj5NVzq pic.twitter.com/JbaahcfYV8
— ACCC (@acccgovau) October 3, 2025
The Belong Migration Controversy
Between October and November 2020, Telstra migrated 8,897 Belong NBN customers from plans offering 100 megabits per second (Mbps) download speeds and 40 Mbps upload speeds to a service with upload speeds slashed in half to just 20 Mbps.
Download speeds remained unchanged at 100 Mbps, but the company never informed customers about the reduction. More concerning, Telstra continued charging the same monthly fees despite NBN Co reducing wholesale costs by $7 per month for the lower-speed tier.
“Telstra’s failure to inform customers that their broadband service had been altered denied them the opportunity to decide whether the changed service was suitable for their needs,” ACCC Commissioner Anna Brakey said in an official statement.
The court found this silence constituted false and misleading representations under Australian Consumer Law. Many affected customers only discovered the downgrade when they noticed slower performance during video calls, file uploads, or remote work activities.
Impact on Remote Work and Digital Life
Upload speed matters significantly for modern internet users. The capability determines how quickly data travels from personal devices to the internet, affecting everything from video conferencing to cloud storage backups.
During 2020, when the changes occurred, Australia was experiencing widespread lockdowns due to the pandemic. Households relied heavily on stable internet connections for:
- Remote work and virtual meetings
- Online education for children
- Streaming entertainment content
- File sharing and cloud storage
- Video calls with family and friends
By halving upload speeds without notice, Telstra potentially compromised the quality of these essential activities for thousands of Australian families during an already challenging period.
Customer Compensation and Remediation
Beyond the $18 million penalty, Telstra must compensate affected customers with $15 for each month they remained on the reduced upload speed plan. The total remediation package exceeds $2.3 million.
Some customers received payments before the ACCC commenced proceedings in December 2022, while others are being contacted now under a court-enforceable undertaking. Affected customers should receive email notifications from Belong about their eligibility for compensation.
The Federal Court also ordered Telstra to contribute to the ACCC’s legal costs, though the specific amount has not been publicly disclosed.
Broader Pattern of Regulatory Issues
This penalty adds to a concerning pattern of regulatory setbacks for Australia’s largest telecommunications provider. Recent enforcement actions include:
- March 2025: $626,000 penalty for spam breaches
- December 2024: $3 million fine for emergency call disruptions
- July 2024: 13-hour disconnection from emergency call relay service
- November 2022: $15 million penalty for misleading NBN speed claims
- May 2021: $50 million fine for unconscionable conduct selling mobile contracts to Indigenous consumers
“Misleading pricing and claims in relation to essential services, with a particular focus on telecommunications, is one of ACCC’s current enforcement priorities,” Commissioner Brakey emphasized.
The watchdog’s heightened scrutiny reflects growing concerns about consumer protection in Australia’s essential services sector, particularly as cost-of-living pressures mount.
What This Means for Australian Consumers
The ruling sends a clear message to all service providers: changing key service specifications without customer notification breaches consumer law, regardless of whether prices change.
Consumers who suspect similar issues with their internet services should check their plan details and contact their provider immediately. The Telecommunications Industry Ombudsman can assist with unresolved complaints.
Telstra cooperated with the ACCC during proceedings and made joint submissions regarding penalties. A company spokesperson stated: “We should have notified customers about the changes to their services and we’re sorry we let them down.”
Despite these regulatory challenges, Telstra reported a 6.5% net profit increase to $1.03 billion for the six months ending 31st December 2025.
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FAQs
Q: How do I know if I was affected by this issue?
A: If you were a Belong NBN customer with a 100/40 Mbps plan between October and November 2020, you may be eligible for compensation. Telstra is contacting affected customers via email.
Q: What should I do if I haven’t received compensation yet?
A: Contact Telstra on 13 22 00 or check your Belong account. Under the court-enforceable undertaking, Telstra must remediate all affected customers.
Q: How can I check my current internet speeds?
A: Use online speed test tools and compare results against your plan specifications. If speeds consistently fall short, contact your provider.
Q: Are other telcos being investigated for similar issues?
A: The ACCC maintains ongoing investigations across the telecommunications sector as part of its enforcement priorities for 2025-26.
