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Misleading and deceptive advertisements

Discuss About The Competition Australian Consumer Commission?

The Australian Competition and Consumer Commission (ACCC) found that the advertisements displayed by the TPG Internet Pty Ltd. Were;

Misleading and deceptive contrary to the ACL due to differences between the major headline offer and comparatively less significant terms which matches with the provided offer(Corrs, 2013).

The ACCC also claimed that a number of advertisements were the breach of the regulations of the TPA because of its failure to specify in a highlighted manner and as a particular amount with a particular price for the bundle of services being provided by the company.

The primary judge sustained the claims of the ACCC and considered a fiscal penalty of $2 million over the company(AustLII, 2013).

It was claimed that the commercials were found to be misleading and deceptive because of its contravention with Section 52 of the TPA and Section 18 of the ACL because of exhibition of discrepancy between the important headline offer to the consumers and the comparatively less important advertisement matching with the offer(Dixon, 2013).

It was stated that the publishing of initial advertisements and then the amended advertisement in continuance was the contravention of sections 52, 53(e), 53(g) and 53C of the TPA subsequent to its introduction to sections 18, 29(1)(i) and 29(1)(m) of Schedule 2 of the CCA (ACL) (Thampapillai et al., 2015).

In this context, the ACCC claimed that several of the advertisements disobeyed section 53C (1) (c) of the TPA because of its failure to state in an important manner and as a particular offer at the solitary price for the bundle of services being presented by the company to the consumers(Battersby & Webb, 2013).

Bundling- The primary judge concluded the case on the basis of target audiences of the TPG, which constituted the extensive consumers of Australia in the region of the mainland city capitals, who were considered to be the potential users of the broadband internet services. It was determined by the judge that target audiences also incorporated the new users of the ADSL2+ services. It was also fund that because of varying range of available internet options, it was not easy for a reasonable consumer to assume whether the services being provided by the company were separate or bundled. Thus, it was established that the bundling condition operated in the situation as it doubled the monthly charge mentioned in the headline for the consumers as the further landline telephone charges was supposed to be an unnecessary service that was not realized and required by the consumers (High Court of Australia, 2013).

Contravention of statutory provisions

Set-up fee- It was established by the primary judge that setup fees are always required for the purpose of broadband contracts maximum 2 years and the target consumers would be well aware about this fact. However, the impression of the dominant message that no further charges will be levied was preferred to be noticed by the consumers. If the intentions of the company were clear, then the advertisements were required to mention clearly about the requirement of further fee. It was found that there was lack of clarity in the offer of the company in advertisement on television, radio, internet and newspaper regarding the requirement of the setup fee (Edghill & Edwards, 2013).

Single price- It was determined by the primary judge that the company failed to importantly display the solitary price for the services being provided by the company in its initial advertisements on television, radio, internet and newspapers. It was established that the solitary price of $509.89 was not mentioned by the company for the package of services in an important manner in compliance with Section 53C (1) (c) of the TPA, in the preliminary advertisements by the company in television, newspapers and internet (Crennan & Gageler, 2013).

On the appeal of TPG to the Full Court of the Federal Court of Australia, all the findings of the primary judge were put to one side and the pecuniary penalty of $2 million was lessened to $50,000 regarding the result of the contravention which was sustained by the court. In this context, the difference in approach claimed by the Full Court of Jacobson, Bennett, and Gilmour JJ were;

Whether the dominant message in the advertisement should be characterized as misleading. In this context, the Full Court stated that considering solely the dominant message does not consider the requirement regarding the characteristics of the hypothetical readers or viewers, which include information related to the bundling process of services and the knowledge regarding applicability of the set-up charges.

The Full Court stated that the legislation does not function for the benefits of such people who do not take responsibility of their personal interests. Section 18 of ACL does not compel an obligation on a party to provide the information so as to evade the cost or carelessness of another party having equivalent bargaining power as well as competency.

Thus, the court stated that conduct can be considered as misleading or deceptive as per its inclination to direct into mistake. There is requirement to establish a sufficient contributory association between the conduct and the mistake taking into consideration the people exposed to it.

Bundling, Set-up fee, Single price

The Full Court did a mistake in considering that the opinion of the primary judge was mistaken in considering the dominant message in the advertisement as significant. It was stated by the court that the target audiences could not have been anticipated to concentrate on the advertisements because of their focus on the matter of their purchase and their lack of dutiful attention did not account for their failure to take rational care regarding their benefits. 

Secondly, the Full Court made a mistake in failing to realize that the inclination of the commercials by TPG to deceive was not counterbalanced by the acknowledgment of the Full Court regarding the information of the target audience that ADSL2+ services by the company may be offered in the form of "bundle" with extra charges. It was held by the majority that the dominant message would definitely take priority over any kind of specific knowledge of the target audiences that ADSL2+ services were commonly offered in the form of bundle.

The target audiences of TPG are not such type of potential purchasers who emphasize upon the matter of their purchase in the showrooms. The advertisements were an interference over the awareness of the target audiences, which should not always be welcomed. The main purpose of the advertisements was to grab the attention of the target audiences. However, while the attention of the audiences might have been grabbed, it cannot be expected from the consumers to pay a close attention to the advertisement. The attention of the judges focused on listening and viewing the advertisements certainly not is gratified in order to examine them for the purpose of the proceedings of case. The Full Court rightly recognized that majority will only give perfunctory and general attention without taking into consideration the reasonable care of their own interests.

Secondly, it was not the case in which, the tendency of the advertisements of the company were to mislead the consumers by providing attention closely to a part of the advertisement and ignoring the balance. The intention of the company was to mislead the consumers' select some words in the advertisement to be emphasized more upon and to transfer the remaining to comparative insignificance.


If I was in a job in the marketing division of an internet services provider, in order to commence an advertising operation, which could promote an eye-catching plan for the membership to be considered by the potential customers, I will advise to consider certain aspects while preparing an advertisement;

In the advertisement, it should be carefully assessed what the dominant message is conveying to the customers wherever, emphasis is placed or headline is used in the advertisements.

It would be safe not to assess the interpretation of the ordinary reasonable customer about the assumed knowledge regarding the product through the advertisement and everything should be clearly explained.

Deterrence or avoidance can be considered as a fundamental issue in the assessment of penalty for the breach under the existing business law of the region if the motivating power behind the misleading conduct of the company is proved to be the commercial gain for the company.

Therefore, it will be recommended that the advertisement should be clearly explaining the offers and services provided by the company along with the exact amount of fee to be paid by the customers and the benefits if it occurs. Everything should be mentioned in the advertisement in order to avoid any kind of confusions in future. 

References

AustLII, 2013. Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 (12 December 2013). [Online] Available at: https://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2013/54.html?stem=0&synonyms=0&query=title(Australian%20Competition%20and%20Consumer%20Commission%20and%20TPG%20Internet%20Pty%20) [Accessed 16 Sepember 2017].

Battersby, M. & Webb, K., 2013. Advertising and the ACL: Fine print couldn't save TPG Internet in the High Court. [Online] Available at: https://www.claytonutz.com/knowledge/2013/december/advertising-and-the-acl-fine-print-couldn-t-save-tpg-internet-in-the-high-court [Accessed 16 September 2017].

Corrs, 2013. High Court reinstates $2 million penalty against TPG. [Online] Available at: https://www.corrs.com.au/publications/corrs-in-brief/high-court-reinstates-2-million-penalty-against-tpg/ [Accessed 16 September 2017].

Crennan, B. & Gageler, K.J., 2013. Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54. [Online] Available at: https://www.jade.world/case/2013HCA54 [Accessed 16 September 2017].

Dixon, K., 2013. ACCC v TPG - The ACCC Bites Back in a High Court Win Overruling TPG’s Successful Appeal. [Online] Available at: https://www.addisonslawyers.com.au/knowledge/assetdoc/7f0dda0ad438ee0d/ACCC%20-%20TPG%201068319_1.pdf [Accessed 16 September 2017].

Edghill, K. & Edwards, M., 2013. Australia: ACCC v TPG Internet Pty Limited: High Court rules on claims of misleading headline advertising. [Online] Available at: https://www.mondaq.com/australia/x/281682/advertising+marketing+branding/ACCC+v+TPG+Internet+Pty+Limited+High+Court+rules+on+claims+of+misleading+headline+advertising [Accessed 16 September 2017].

High Court of Australia, 2013. Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54. [Online] Available at: https://www.hcourt.gov.au/assets/publications/judgment-summaries/2013/hca54-2013-12-12.pdf [Accessed 16 September 2017].

Thampapillai, D., Tan, V., Bozzi, C. & Matthew, A., 2015. Australian Commercial Law. Cambridge University Press.

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