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Australian Competition And Consumer Commission Appellant And TPG Internet Pty. Ltd. Add in library

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Question:

Describe about the Australian Competition and Consumer Commission Appellant and TPG Internet Pty. Ltd.?
 
 

Answer:

Australian Competition and Consumer Commission Appellant and TPG Internet Pty. Ltd. Respondent; [2013] HCA 54The nature of TPG’s advertising that caused ACCC to commence the proceedings.
 

The Respondent here is the TPG Internet Pty Ltd ("TPG") which has been involved in the campaign regarding multimedia advertising. During the advertising campaign the company initially made an offer to the customers to give them an attractive price for the ADSL2+ service that they were providing. This service was primarily related to the use of the home telephone connection of the customer and likewise gives them a broadband service and also they promised to not charge for any download data limit. ( para 2)

  • The advertiseme9nt board made a prominent display of the offer with more focus on the scheme of the company to provide an internet ADSL2+ service at the cost of $29.99 per month. (para 1)

  • However, the advertisement in a more ambiguous and less prominent manner displayed that the offer was valid only when it is bundled with the home telephone connection for $30.00 per month that will be provided by TPG. (para 2)

  • The offer further states that the customers are required to give a deposit of $20.00 for the telephone charges and pay setup fee of $129.95
  • This advertisement by TPG was considered to contravene the Australian Consumer laws. (para 3)

The Statutory Provisions contravened by the company

There are quite a few statutory provisions that is said to have been breached by the TPG Company.

  • The company is said to contravene section 52 of the Trade Practices Act 1974 that provides that with regard to trade or commerce no company shall engage in misleading or deceptive conduct. (para 9)

  • The company has further contravened Section 53 of the Trade Practices Act 1974 that provides that no corporation shall make any false representation relating to the price of goods or any conditions or warrantee or guarantee. (para 10)

The findings of the Primary Judge

  • Regarding the bundling condition the primary judge opined that the given condition in the advertisement should have been more clear and prominent to remove the deception. (para 23)

  • He also stated that since the target audience was the first time users it was likely that they would rely on the dominant part of the advertisement and fall prey to the deception. (para 19)

  • Regarding the set up fees the primary judge said the advertisements were not specified regarding the extra fees of the service. (para 26)

  • For the single price the judge stated that according to section 53C (1) (c) of the TPA, the price was not clear. (para 28)

The differences in principle between the approach of the Full Court and the approach of the primary judge

  • The Full Court judgment was quite different from the primary judge’s decision. Contrary to the previous decision the Full Court held a different view for the dominant message in the advertisement. (para 30)

  • The Court stated that the conduct which is under scrutiny has a lot of words and in accordance to their opinion it is wrong to select only some of the words and neglect the rest as they too give meaning to the prominent words. (para 35)

  • Further the Court disagreed with the approach of the primary judge and opined that they were not misleading advertisements because by perfunctorily viewing the bundling conditions cannot be ignored. The Court also held that any ordinary prudent person would know that the services that have been offered would come as a package or bundle. (para 44)

The High Court’s opinion of the approach taken by the Full Court

  • According to the High Court, the decision of the Full Court was wrong in holding the judgment of the primary court wrong. The High Court states that the dominant message is extremely crucial in this case. (para 52)

  • According to the High Court the opinion of the CJ Gibbs in the case of Puxu as has been stated by the Full Court is not crucial and is surely cannot be properly applied to the conditions in the present case.

  • The High Court opined that the Full Court was wrong in not appreciating the advertisement tendency being neutralized by attributing the knowledge of the court regarding the target audience about the ADSL2+ services that was offered in bundle. (para 47)

Puxu was not a proper precedent to apply to the TPG advertising according to the High Court

  • The case of Puxu was regarding the deceptive conduct depending on the sale of goods by the appellant which was indistinguishable from the ones sold by respondent. (para 46)

  • The High Court refused to accept this precedent primarily because the target audiences were not the potential purchasers who focused on the subject matter of the purchase. (para 46)

  • Additionally, the High Court also stated that the Full Court did not recognize the advertisement tendency was misleading when they asked about bringing in negotiation with TPG instead of one of the competitors relying on the general trust of the message. (para 48)

  • The High Court also stated that primary issue in the case was not the tendency of the deception of the advertisements of the company as a result of the disposition of the target audience since that is not dependant on the conduct of the company in order to closely follow the advertisement wordings. (para 51)
 

The approach of the High Court regarding the dominant message

Regarding the dominant message the High Court opined that the main issue here was whether the fine print of the advertisement was sufficient to dismiss the question of dominant message that had been conveyed in the headline. Alternatively, the High Court opined that this question was associated with the probable customers of the internet services.

The most important question as stated by the High Court was that whether the probable customers who were reading the advertisement with a clear mind would generally get an impression that the advertisement was separate broadband internet service for a separate price of $29.99 per month.

The assumed level of knowledge in TPG’s target audience

  • Regarding the assumed level of knowledge related to the target audience the opinion of the High Court was the same as the approach given by the primary judge.

  • The High Court opined that the users of ADSL2+ had more knowledge regarding the services of the TPG internet company than the ADSL1+ since they were knew to the services. (para 53)

  • Additionally, the assumed level of knowledge also did not imply that the prudent or ordinary customer will have similar amount of knowledge. (para 53)

According to the High Court is intention essential for the advertising to be misleading

  • With respect to the intention of the company to mislead or deceive the opinion of the High Court was that this intention to mislead will not be considered as an integral part of the contravention charges against the company. In the given case there has been no implications regarding that. (para 58)

  • However, the High Court does state there can be no two ways relating to the fact that the company will have the intention for creating a false impression in the minds of the potential consumers with respect to the attractiveness of the offer. (para 58)

Advise based on the understanding of the High Court ruling

After detailed understanding of the ruling of the High Court in this case, the probable advice that I would give to the internet provider about launching an advertising campaign would be that all the clauses relating to the services of the internet company should be prominent and there should be no bias relating to the important and less important clauses. Additionally there should be no hidden costs and all offers and payment information needs to be given equal weight age.

 

Reference

Australian Competition and Consumer Commission Appellant and TPG Internet Pty. Ltd. Respondent [2013]HCA 54.

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