DOJ cautions telcos on internet services

By , on December 15, 2014

Department of Justice / Wikipedia Photo
Department of Justice / Wikipedia Photo

MANILA – The Department of Justice (DOJ) discouraged telecommunications companies from practicing false advertising  otherwise they will be facing the risk of being penalized.

In a statement, DOJ noted that the “fair use policy” (FUP) imposed to the subscribers by Internet service providers (ISPs) “is inconsistent” with Consumer Act’s provisions that reprimand misleading trade practices and advertisements.

“The contention here is simple: ‘Unlimited’ means unlimited,” said the DOJ said in its advisory to telecommunications firms last December 9.

Justice Secretary de Lima said, “While there is nothing wrong with advertisements and promotions, what is promised must be delivered. Our law requires not only truth in advertising, but also fairness in packaging and consistency in the provision of the service.”

According to DOJ, the FUP noted that Internet connection is “throttled when usage reaches a certain volume of data bits.” This result to slowing down of the Internet once a subscriber, who availed of unlimited data service, reached the mandated cap for every user.

“Unlimited data is like the unlimited rice or buffet concept. Restaurants cannot offer an ‘eat all you can’ promo and when a customer eats more than the average person, actually stop [the customer] and not honor the commitment,” said Assistant Secretary Geronimo Sy, chief of the DOJ Office for Competition.

Thus, DOJ asked for the assistance of the Department of Trade and Industry (DTI) and the National Telecommunications Commission “to monitor and penalize noncompliant telcos.”

“The imposition of data throttling on unlimited Internet could also be regarded as a violation of the provisions prohibiting false, misleading or deceptive advertisements, hence deemed punishable in accordance with law,” the DOJ stressed.

Misleading business practice is a violation of the Consumer Act. Violators risk facing penalties including a fine of between P500 and P20,000, and imprisonment of between three months and two years, or both.

The imposition of data throttling is a possible violation of the Consumer Act because the latter prohibits companies from false, misleading, or deceptive advertisements.

Administrative fines of between P500 and P300,000 and an additional P1,000 fine for each day of continuing disobedience may also be slapped against the violating party.