Telstra has been fined $10 million in the Federal Court for signing its mobile customers up to be charged directly for third-party online content without their knowledge or agreement.
Up to 100,000 Telstra customers were signed up to its Premium Direct Billing (PDB) service by default, and paid extra charges on their mobile bills.
The PDB service allowed Telstra customers to purchase digital content from third-party developers, such as games and ringtones, outside the usual app marketplaces such as Google Play.
But Telstra PDB subscribers were charged even if they did not know they had been signed up, or if they used the service unintentionally.
In March, the ACCC took Telstra to the Federal Court, where the company admitted it made misleading or deceptive representations to customers, because it never adequately informed them that PDB was a default setting on their accounts.
But Telstra's fine is just a fraction of the $61.7 million in net revenue Telstra made from the PDB service up till October last year.
Justice Moshinsky said that in his judgement Telstra's conduct was at the serious end of the spectrum.
"The proposed penalties reflect the seriousness of the offending and should operate as a deterrent against such conduct being engaged in by Telstra or other companies in the future."
As part of its agreement to resolve the case, Telstra has agreed to stop operating the PDB service entirely.
The company estimates it has provided refunds of at least $5 million to its affected customers.
The ACCC says several million dollars in further refunds may need to be paid.
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