Most Read Contributor in Australia, September 2016
The Australian Competition and Consumer Commission's (ACCC)
recent victory against TPG in the High Court has cemented its
resolve to target large companies that breach consumer protection
In ACCC v TPG Internet Pty Ltd  HCA 54 (the TPG
Case), the High Court upheld a $2 million fine against TPG in
relation to the advertisements for its 'Unlimited ADSL2+'
service. The case marks the first time a fine of this type has been
challenged in the High Court, and the ACCC sees the decision as a
firm endorsement of its efforts to establish strong deterrents to
discourage companies from infringing consumer laws.
Background: TPG Case
The TPG Case considered whether print advertisements run by TPG
promoting its Unlimited ADSL2+ service were misleading or deceptive
under section 52 of the Trade Practices Act 1974 (Cth)
(now section 18 of the Australian Consumer Law).
The advertisements featured an offer to supply ADSL2+ for $29.99
per month. Below this offer in substantially smaller print was a
qualification that the broadband service came bundled with the TPG
home telephone service, which would cost consumers an additional
$30 per month. The ACCC pursued legal action against TPG, alleging
that the advertisements did, or were likely to, mislead or deceive
consumers as to the actual cost of the ADSL2+ service.
In its December 2013 decision the High Court affirmed the
Federal Court's finding that the advertisements were misleading
and reinstated the $2 million penalty that had been reduced by the
Full Federal Court on appeal. The approach endorsed by the High
Court focuses on the impression created by the "dominant
message" in the relevant advertisement. Specifically, the
Court considered whether the TPG ads "were apt to bring
[consumers] into negotiation with TPG rather than... its
competitors on the basis of an erroneous belief engendered by the
general thrust of TPG's message".
The High Court emphasised that while a reasonable consumer may
know that ADSL2+ services are commonly bundled with telephone
services, this was not enough to neutralise the likelihood that the
advertisements were misleading.
What this means
In a recent article in the Australian Financial Review, ACCC
Chairman Rod Sims was quoted as saying that the TPG Case set a new
benchmark for the sort of repercussions a company can expect if it
breaches consumer laws. With the High Court win under its belt Sims
indicated that the ACCC feels confident in going forward with its
efforts to pursue major penalties for large companies that engage
in misleading or deceptive conduct: "Our focus is on the
larger companies, that is where the biggest detriment is... we want
to make sure that they are taking consumer laws very
In particular, the ACCC has indicated that it will target
misleading representations. Agencies must be careful when
emphasising certain features of goods or services that the dominant
message or general thrust of the advertisement does not create a
situation where a consumer may be misled. A disclaimer in fine
print will not save an advertisement from being misleading if it
only serves to qualify a misleading statement.
In light of these developments advertising agencies should
ensure that they fully comply with consumer laws when creating
marketing materials and ensure that their client has signed off on
the factual claims in marketing materials prior to the public
release of the materials.
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.
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