Crazy Domains Fined (Dreamscape Owner Fined)
Dreamscapes: Alleged Misleading Marketing Tactics by ACCC
Parent Company of Crazy Domains, Dreamscape Networks in the Spotlight
In a recent judgment that underscores the value of consumer trust, telecommunications giant One NZ, formerly known as Vodafone NZ, has been handed a substantial fine for misleading its customers. This case, presided over by Justice Simon Moore in the High Court, accentuates the serious consequences of deceptive business practices. This article delves into the intricate details of One NZ’s deceptive advertising of its FibreX broadband service and the broader repercussions for the New Zealand broadband market.
Case Background
The controversy traces back to 2016 with the introduction of One NZ’s FibreX broadband service, which was based on Coaxial cable technology. The marketing strategies employed by One NZ led consumers to mistakenly believe that FibreX was a fiber-to-the-home (FTTH) broadband service, which is technically superior to coaxial cable. Additionally, the company incorrectly claimed that FibreX was the exclusive broadband service available in certain areas, thereby restricting consumer choice.
Nature of Misconduct
Over a period of two years, from 2016 to 2018, One NZ engaged in misleading conduct. The Commerce Commission, New Zealand’s authority responsible for enforcing fair trading, charged the company with 18 violations under the Fair Trading Act 1986. These charges pertained to falsely representing FibreX as FTTH broadband and suggesting it was the only broadband service available to certain consumers.
Legal Proceedings and Outcome
Initially, the District Court found One NZ guilty and imposed a fine of $2.25 million in April 2021. Both parties, One NZ and the Commerce Commission, appealed the decision. One NZ sought to overturn its convictions related to branding and reduce the penalty, whereas the Commerce Commission argued for a higher fine due to the gravity of the offenses.
The High Court’s Ruling
In the appeal, the High Court rejected One NZ’s appeal against its convictions and agreed with the Commerce Commission on increasing the penalty. Justice Moore emphasized the need for a more substantial fine that would act as a deterrent. Consequently, the original fine was replaced with a new penalty of $3.675 million.
Consumer Impact
The deceptive marketing by One NZ significantly affected consumers, misleading them about the nature of FibreX and depriving them of the opportunity to make informed broadband choices. This not only disadvantaged consumers but also skewed competition, undermining those providing genuine FTTH services.
Effect on Market Competition
One NZ’s misleading tactics gave it an unfair edge over competitors offering actual FTTH services. This distortion of competition was detrimental to the integrity of the market and hampered the efforts of the government’s Ultra-fast Broadband (UFB) rollout, which was aimed at promoting FTTH broadband uptake.
The Judgment’s Importance
This ruling against One NZ is a significant win for consumer rights. John Small, Chairman of the Commerce Commission, highlighted the necessity for businesses to maintain honesty and clarity in their communications. The stringent penalty emphasizes the seriousness of One NZ’s misleading actions and serves as a warning to other corporations.
One NZ’s Stance Post-Judgment
In response to the judgment, a spokesperson for One NZ expressed their disappointment and disagreement with the Court’s decision. The company is contemplating its next steps and has not made further comments at this stage.
Future Implications
The High Court’s decision is a stark reminder for businesses about the importance of ethical marketing and the repercussions of deceiving consumers. It also demonstrates the pivotal role of regulatory bodies like the Commerce Commission in maintaining fair trade standards and protecting consumer rights.
Enough of a deterrant?
The case against One NZ for its deceptive marketing practices resulting in a significant fine is a lesson for all businesses in New Zealand. Upholding trust and providing accurate information is essential in any business-consumer relationship. This landmark ruling not only holds One NZ accountable but also signals to other businesses that deceptive practices are unacceptable. It is hoped that this case will lead to a more honest and transparent business environment in New Zealand’s broadband service market.
Info about Crazy Domains and Affiliates from ChatGPT as at December 2023:
Dreamscape Networks, a leading online solutions provider, owns several prominent brands in Australia and New Zealand:
Crazy Domains: A top domain registration and web hosting service in Australia.
Freeparking: Acquired in 2020, Freeparking is New Zealand’s leading domain name registrar and web hosting provider, serving over 90,000 customers.
Openhost, Discount Domains, and Domains4less: These are additional New Zealand-based brands under the Freeparking Group, offering domain registration and web hosting services.
These acquisitions have expanded Dreamscape Networks’ presence across Australia, New Zealand, and Southeast Asia.
Web.com, a leading web technology company, has expanded its presence in Australia and New Zealand through strategic acquisitions:
Dreamscape Networks: In November 2019, Web.com acquired Dreamscape Networks, the parent company of Crazy Domains and Freeparking, thereby extending its footprint into Australia, New Zealand, and Southeast Asia.
Webcentral Group: In July 2020, Web.com announced an agreement to acquire Webcentral Group, a provider of digital services for small and medium Australian businesses. This acquisition further solidified Web.com’s position in the Australian market.
Through these acquisitions, Web.com has enhanced its portfolio of brands and services in the region, offering domain registration, web hosting, and digital marketing solutions to a broad customer base.
Further Articles and Source References
Web hosting company fined for misleading customers at checkout
Crazy Domains owner fined for so-called “subscription traps”
9 News: Web hosting business stung with $50k fine over alleged checkout ‘trap’
Crazy Domains parent fined for misleading ‘free gifts’ promotion
Web hosting business pays penalties for allegedly misleading customers about ‘free gifts’
Dreamscape Networks pays $56k in penalties for misleading ‘free’ product claims
ACCC – Crazy Doamins pays penalties for allegedly misleading customers with ‘free gifts’
⚠️ Our Public Service Cautionary Advice
Based on our PERSONAL Experiences: Avoid Using Crazy Domains or any Company associated with them.
We advise personally against using Crazy Domains for domain registration, hosting, or other web services.
We used Discount Domains (Part of Free Parking) and it was a Nightmare. We Experienced:
- Poor Customer Support: Difficulty in reaching responsive and helpful support staff or staff that can actually understand English.
- Billing Discrepancies: Unexpected charges or difficulties in cancelling services – as per this ACCC fine.
- Reliability Concerns: Frequent downtimes and technical issues affecting site performance (We experienced Broken Domain Portals)
- Limited Flexibility: Difficulty with transferring domains or services, which can limit control over your online assets.
Consider researching alternative providers with a stronger reputation for reliability and customer satisfaction
to ensure a smoother experiencefor your website and business needs.