The Federal Court has ruled a $2 million fine imposed on internet provider TPG should be slashed to just $50,000.

The Australian Competition and Consumer Commission (ACCC) took TPG to court last year, alleging that its advertisements for broadband plans were misleading.

In the advertisements TPG promised ADSL2+ broadband for $29.99 a month.

The fine-print catch was that you had to pay another $30 per month for phone line rental, plus set-up fees that in some cases were not disclosed in the ads.

However, the Federal Court ruled the fine was too steep because only a small number of advertisements could be considered misleading.

The court has also ordered the ACCC pay 75 per cent of TPG's $600,000 in legal fees.

The consumer watchdog described the court's decision as disappointing.