Adds Telstra's response in paragraph 6

Feb 21 (Reuters) - Australia's federal court has ruled that telecom firm Telstra TLS.AX misled customers about the downgrading of its broadband plan's upload speed, the country's competition regulator said on Friday.

The Australian Competition & Consumer Commission (ACCC) had initiated the lawsuit against the company in December 2022, alleging Telstra downgraded broadband upload speed for nearly 9,000 residential customers in October and November 2020 without informing them or lowering its charges.

"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 Liza Carver said in a statement.

The ACCC is seeking penalties, consumer compensation and other orders, with the final decisions to be made by the court at a later, yet-to-determined date.

"We expect better from the country's largest retail broadband internet service provider and believe these customers, who ultimately received a service they did not agree to, should be compensated," Carver said.

"We're disappointed by this outcome, but we respect the court's findings and will review the decision in full before deciding on further action," a Telstra spokesperson said in an emailed response to Reuters.

(Reporting by Himanshi Akhand in Bengaluru; Additional reporting by Roshan Thomas & Aaditya Govind Rao in Bengaluru; Editing by Sherry Jacob-Phillips)

((Himanshi.Akhand@thomsonreuters.com;))