On 12 December 2013 the High Court handed down judgment in
Australian Competition and Consumer Commission v TPG Internet Pty
Ltd. The High Court considered whether TPG's advertisements
breached Australian Consumer Law and the Trade Practices Act, and
if so, what should be taken into account in determining the
From September 2010 to November 2011, multi-media advertisements
for TPG prominently displayed that its ADSL2+ broadband internet
service could be obtained for $29.99 per month. In actual fact in
order to acquire this, customers also needed to obtain a $30 per
month TPG home phone service for at least 6 months. There was also
an additional $129.95 setup fee and $20 deposit for phone charges.
In the advertisements, terms that qualified the offer were
displayed much less prominently. The ACCC believed that the
advertisements were misleading and deceptive, and brought
proceedings against TPG.
The High Court held that the advertisements' "dominant
message" was of crucial importance. Where the dominant message
of an advertisement doesn't fairly represent the offer, it will
be deemed misleading. The Court found that even where consumers do
not enter into a contract under the influence of a misleading
advertisement, a breach of the law may occur at the point where
members of the target audience are lured into the "marketing
web" because of their incorrect belief that was formed because
of the advertisement. This was held to be the case, even where the
customer came to understand the true nature of the offer when the
contract was entered into.
The High Court said that TPG advertisements tended to be
misleading. The majority did not accept that this could be remedied
or excused by the possibility that members of the target audience
know that ADSL2+ services may be offered as a bundle.
In considering the size of the penalty, the High Court outlined
three points that justified the seemingly hefty $2 million
the number of contraventions – 9 in total, taking into
account the different forms of media
TPG's undertaking – in 2009 TPG made an undertaking
under section 87B of the Trade Practices Act to the ACCC to not
engage in misleading or deceptive conduct in general
general and specific deterrence – the majority quoted a
Federal Court judgment to highlight the role of deterrence
considerations in assessing the appropriate penalty:
"penalties must be fixed with a view to ensuring that the
penalty is not such as to be regarded... as an acceptable cost of
TPG is not the only telecommunications company to be fined for
misleading or deceptive advertising – Optus was fined
$178,200 in 2011 and $3.61 million in 2012.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).