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

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Questions:

The sequence of court hearings

• The Australian Competition and Consumer Commission (ACCC) brought proceedings against internet provider TPG because of an advertising campaign for internet services TPG had been conducting.

• Initially, the proceedings were heard by a single judge, who is referred to in the judgment as "the primary judge". ACCC was largely successful against TPG in those proceedings.

• TPG, having lost the case before the primary judge, appealed to three judges, referred to in the judgment as the “Full Court". That court largely disagreed with the conclusions of the primary judge and set aside his decision. In effect, TPG won its appeal to the Full Court.

• This left ACCC as the loser. It appealed to the High Court, which disagreed with the conclusions of the Full Court in favour of TPG and essentially reinstated the decision made by the primary charge in favour of ACCC.

The judgment you are reading, and to which the assignment questions relate, is the judgment of the High Court only. However, to enable the "ratio" of its decision to be understood, the High Court includes in its judgment summaries of the reasons which the primary judge and the Full Court gave in coming to their respective (and contradictory) decisions.
 
1. Briefly describe the nature of TPG’s advertising which caused ACCC to bring these proceedings

2. What statutory provisions did ACCC allege that TPG’s advertising contravened

3. What were the findings (conclusions) of the primary judge about the following aspects of the advertising

• bundling.

• the set up fee.

• single price.

4. What were the differences in principle between the approach of the Full Court and the approach of the primary judge in evaluating whether the TPG advertising was misleading?

5. The High Court concluded that the approach taken by the Full Court was not correct. For what reason or reasons did the High Court come to this conclusion?

6. The Full Court, in coming to its conclusions, applied as a precedent the ratio in a case called

Parkdale Custom Built Furniture v Puxu (“Puxu”). The High Court said that the Full Court wrongly applied the principle in Puxu. Explain why the High Court thought Puxu was not a proper precedent to apply to the TPG advertising

7. What did the High Court have to say about the “dominant message” approach?

8. What did the High Court say about the assumed level of knowledge in TPG’s target audience?

9. Is an intention to mislead essential for advertising to be misleading? Explain what the High Court thought about this

10. If you were employed in the marketing section of an internet service provider or a fitness centre which was about to launch an advertising campaign promoting an attractive “plan” for membership in which there were several “parts” (costs and benefits) to be taken into account by potential customers, what advice would you give about the format of the advertising, based on your understanding of the High Court’s ruling in ACCC v TPG?
 
 

Answers:

1.  TPG Internet Pty was a company engaged in providing internet connections to consumers. The name under which the company decided to give away its internet and phone connections was ADSL2+. Although the price mentioned for services in the advertisement of the company was $29.99 but there were hidden costs. The cost which a consumer had to pay after all the additional costs amounted to be $149.95 (ACCC,   2015). Hence, this was the reason for further proceedings which were taken against TPG.

2.  TPG had been misleading consumers by providing internet and phone connections at higher amount than normal. The advertisements were misleading and the company went against the provisions of the Trade Practices Act 1974. The price mentioned for services in the advertisement of the company was $29.99 but there were hidden costs. The cost which a consumer had to pay after all the additional costs amounted to be $149.95. Hence, this was the reason for further proceedings which were taken against TPG (Dennis, 1996).

3.  Bundling: It was found out by judge in the case that advertisement misled consumers and there were nothing declared about the additional costs either on TV or radio. Setup fee: Judge realised that set-up charges should be normal and in case of TPG, nothing was made clear by the company. In fact the company didn’t mention anything about the additional set up charges rather it was mentioned that consumer just have to pay one-time for setting up connection. Single price: IN the case, judge found out that there was no one price declared by the company to consumer. The prices kept fluctuating (boosted in every case) which was unfair as per Trade Practices Act 1974.

4.  Primary judge and full-court judge had differences in their opinion. Primary judge held company wrong for misleading consumers whereas full-court judge stated that consumers must be careful about every cost when applying for internet and phone connections (Jeffrey, 1994).

5. There were three key reasons as per which high court decided against full court. One, the opinion of the full court about dominant message was wrong. Second, statements used in regard to puxu used in this case were irrelevant. Third, misleading is one of the wrong practices undertaken by TPG.

6. In this case, the opinion of the full court was dependant on the results of the case park dale Custom Built Furniture v Puxu, but the provisions were wrongly misinterpreted. Park dale Custom Built Furniture v Puxu was about a furniture company so court said that consumers must consider brand before buying it. In this case, it can’t be applied as advertisement was misleading and consumers can’t pay attention to minute details.

7. Although high court stated that company is doing wrong since it can’t issue a misleading advertisement but the court also added that consumers must pay diligence to such advertisements. However, high court do realizes that consumers don’t pay much attention to advertisement and don’t go through details minutely (Ellinghaus, 2000).

8. High court also stated that consumers might have an idea about the availability of in bundle with the telephone. But the advertisement of TPG can misled consumers since they might think that there are no extra costs for connection. The price mentioned for services in the advertisement of the company was $29.99 but there were hidden costs. The cost which a consumer had to pay after all the additional costs amounted to be $149.95. Hence, this was the reason for further proceedings which were taken against TPG.

9.  The high court said that it is not important that companies post misleading advertisements intentionally (Kercher, 2010). However, the primary aim of the company to post such advertisement is to attract clients and present the services in best way possible. TGP case is similar to this as the company tried to present the services in best way but it misled consumers and they had to pay additional costs.

10. After going through High Court’s judgment of the case ACCC v TPG, I would advise the company to withdraw their advertisements and highlight the best features about their services but also mentioning about the additional costs in the services. By this, consumers won’t be misled and would benefit from the services a lot (Patrick, 2001). In this case, the price mentioned for services in the advertisement of the company was $29.99 but there were hidden costs. The cost which a consumer had to pay after all the additional costs amounted to be $149.95. Hence, this was the reason for further proceedings which were taken against TPG.

 

References

ACCC.  (2015). Australian Competition and Consumer Commission v TPG Internet Pty Ltd | Opinions on High. 2015. Australian Competition and Consumer Commission v TPG Internet Pty Ltd | Opinions on High. [ONLINE] Available at: https://blogs.unimelb.edu.au/opinionsonhigh/2013/12/12/tpg-internet-case-page/.[Accessed 07 February 2015].

Astrazeneca Pty Ltd v GlaxoSmithKline Australia Pty Ltd (2006) ATPR ¶42-106 at [37]. See Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at [104]-[105].

Dennis, C. (1996), “ACCC TPG Case.” Journal of Law, pp. 890.

Patrick, P. (2001). “Tradition and Change in Australian Law.”, Interpretation Act  (Western Australia), s 43.

Kercher, R. (2010). “An Unruly Child: A History of Law in Australia.”, Legal Journal, pp. 526

Ellinghaus, A. (2000). “The Emergence of Australian Law.”, Statute Law Revision Act, pp. 890

Jeffrey, W. (1994).  "Statutory Interpretation, Law Reform and Sampford's Theory of the Disorder of Law." , Federal Law Review. Pp 77

High Court looms for ACCC vs TPG. 2015. High Court looms for ACCC vs TPG. [ONLINE] Available at: https://www.afr.com/p/business/companies/high_court_looms_for_accc_vs_tpg_rOpLZ0UnqAKA3OLrmyy5PP.[Accessed 04 February 2015].

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