• ACCC v TPG

    Posted on January 22, 2014 at 10:39 am under Business Law category.

    When the Fine Print Isn’t Fine At All

    In a recent High Court case, the Court was asked to determine whether fine print in an advertisement was enough to prevent an advertisement from being misleading to consumers.

    For more than a year TPG ran an advertising campaign that offered ADSL2+ for the cost of $29.99 a month. The offer was display quite prominently and clearly to the audience, less prominently the advertisement also stated that the offer was only available when it was bundled with a home phone service from TPG, at a cost of $30.00 per month.

    Upon receiving complaints about the nature of the advertisement, the Australian Competition and Consumer Commission (ACCC) initiated legal proceedings that alleged the advertisement was misleading and deceptive, and contrary to s 52 of the Trade Practices Act 1974 and s 18 of Competition and Consumer Act 2010. The ACCC objected to the disparity between the use of a large prominent headline offering unlimited ADSL2+ for $29.99 per month, and the less prominent qualifying terms. These terms added significant costs to the offer, requiring that a consumer also bundle a home telephone for an additional $30 per month, pay a single setup fee of $129.95, and also make a $20 deposit for a telephone.

    The ACCC further alleged that TPG failed to properly specify a minimum price for the full offer, in breach of section 53C(1)(c) of the Trade Practices Act.

    In the first instance, Federal Court ordered that TPG pay a $2 million fine. On appeal in the Full Federal Court in December 2012, that fine was reduced significantly to $50,000. Later in December 2013, the High Court allowed the appeal and reinstated the original fine of $2 million.

    In its decision, the High Court upheld the initial judges findings, noting that the advertisements created a dominant message, namely that TPG offered ADSL2+ for $29.99 a month, that when viewed did not properly convey the actual offer.

    The High Court also found that the initial thrust of the advertisement was misleading, and that even if, as argued by TPG, a consumer was able to ascertain the actual price prior to signing up for the deal, it did not discount the fact that the advertisement was misleading. The High Court reiterated that a violation of s 52 did not require financial harm, it only requires that a company engage in misleading or deceptive conduct.