Australia: Clarity in advertising a must, says ACCC

On 12 December 2013 the High Court of Australia held TPG Internet Pty Ltd had engaged in misleading and deceptive conduct when it ran certain advertisements between 2010 and 2011.¹

TPG's advertisements for ADSL2+ "prominently displayed" a price for the service of $29.99 per month, while qualifying the offer 'much less prominently' with conditions that more than doubled the overall price.² The Australian Competition and Consumer Commission (ACCC) was initially successful in pursuing TPG for misleading and deceptive conduct when the case went to the Federal Court of Australia, however it was overturned when TPG appealed to the Full Court of the Federal Court of Australia.

The High Court held that the initial decision of the Federal Court was correct. While the Full Court of the Federal Court noted that 'many persons will only absorb the general thrust' of an advertisement,³ the High Court took the view that it did not give proper consideration to the importance of the "dominant message" of an advertisement. The High Court further reasoned that misleading and deceptive conduct would occur not when a customer signed up with TPG but simply where an advertisement had 'a tendency to lead a consumer into error'.⁴

This was the case in this instance, as the words indicating the price of $29.99 were emphasised while the words indicating the balance of the price were "relegated...to relative obscurity".⁵ The High Court made its finding irrespective of the fact that many consumers would have knowledge of the qualifying conditions in the advertisements.

What does this mean for you and your business?

The decision demonstrates that companies need to focus on clarity when advertising their goods and services, and should ensure that advertisements truthfully represent the overall price. While an attempt to highlight the "attractive" aspect of an offer relative to "less attractive" disclaimers might be effective at wooing customers,⁶ it may also result in the ACCC or a court taking the view that such disclaimers are ineffective and that the advertisement is misleading.

Footnotes

¹Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54.
²Ibid [2].
³Ibid [40], [41], [47], [51], [54].
⁴Ibid [39], [45], [49], [52].
⁵Ibid [51].
⁶Ibid [52].

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