• Property & conveyancing
  • Business legal services
  • Building & construction
  • Legal Counsel Packages
  • Wills and estates

Stay in touch with how the law affects you! Subscribe to our

Subscribe to Forum Law News

* indicates required

Drip pricing targeted by the ACCC

Consumer Law News | March 2017

Misleading and deceptive conduct is prohibited under Australian law in business where the consumer is likely to suffer damage. The prohibited activity covers many aspects of business operations. Most particularly it applies to the way a business presents itself to prospective customers, such as on its website, in advertising or in correspondence with other parties.

Timely examples of misleading and deceptive conduct were illustrated and addressed in two Federal Court decisions on 7 March 2017 involving popular budget airlines.

ACCC -v- Virgin Australia Airlines Pty Ltd (No 2) [2017] FCA 204
ACCC -v- Jetstar Airways Pty Limited (No 2) [2017] FCA 205

The Australian Competition and Consumer Commission (“ACCC”) claimed that both Virgin Australia Airlines Pty Ltd (“Virgin Australia”) and Jetstar Airways Pty Limited (“Jetstar”) had breached sections 18, 29(1)(i) and 29(1)(m) of the Australian Consumer Law (“ACL”) by engaging in misleading and deceptive conduct and representations and “drip pricing” activities. “Drip pricing” involves incremental disclosure of fees and charges arising out of online purchases which results in consumers paying more than they initially realise.

Under section 18 of the ACL, a person must not, in trade or commerce, engage in conduct that is (or is likely to) mislead or deceive. Section 29 of the ACL states that a person must not, in trade or commerce, in connection with the supply of (or promotion of) goods or services:

i. [s29(1)(i)]: make false or misleading representation with respect to the price of goods or services; or

ii. [s.29(1)(m)]: make false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

Both Virgin and Jetstar were ordered to pay pecuniary penalties to the Commonwealth of Australia: Virgin to the tune of $200,000 and Jetstar $545,000.

These proceedings illustrate the importance of transparency for companies that sell goods and/or services online. It is important that your online ordering or booking processes are upfront in respect of price and what is being purchased by customers. It is possible to minimise the risk of contravening the misleading and deceptive conduct and false representation provisions of the ACL by disclosing the existence of additional fees as early as possible in the online ordering process and whenever prices are advertised.

Forum Law Solicitors assist a range of clients with their company law and corporate governance matters. Give us a call for an obligation-free phone chat for up to 30 minutes, or make a time to visit us in Leichhardt on 02 9560 3388.

Forum Law is an active member of several reputable law and industry associations. We have recently obtained ISO9001 accreditation.