Assessing Legal Compliance of Advertisements: TPG Case Study

This article discusses the legal compliance of advertisements through the TPG case study. It explains the Australian Consumer Law and its implications on businesses. The article covers sections 18 and 29 of the ACL and the findings of the primary judge and full federal court. It also compares the TPG case with Parkdale Custom Built Furniture v Puxu. The article concludes with the importance of capturing all relevant information in advertising campaigns.

BUSINESS LAW
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Question 1
When assessing the legal compliance of an advert, one must determine whether the
advert has a dominant message, secondly, one must assess whether there are terms and
conditions, which affect the dominant message; if this is the case, are they sufficiently and
clearly stated. The problems with TPG advertisement based on ACCC were (Australian
Competition and Consumer Commission v TPG internet PTY ltd);
1. The Australian Competition and Consumer Commission argued that the
advertisement was misleading and deceptive for the stated ADSL2+ at $29.99 failed
to disclose other additional charges such as setup fee and the monthly rental charges
2. They also argued that ACCC failed to prominently specify the most minimal charge
in relation to a national advertisement campaign
3. Was in breach of the PTA
Question 2
The Australian Consumer Law (ACL) developed by the Australia’s consumer
protection agencies was meant to aid businesses understand their responsibilities towards
their consumers. Furthermore, ACL attempted to show businesses what was acceptable in
marketing messages in order for them to avoid what would be considered as unfair business
practices. Across Australia, consumers are awarded similar protections whereas businesses
are tasked with similar responsibilities and obligations (The Australian Consumer law).
Section 18 of the ACL:
Advertisement is the most common way through which suppliers and manufacturers
promote their wares. There are instances where the message in the advertisement is too good
to be true and under such circumstances, the message found in the advertisement may be
construed as misleading under the provision of the Australian Consumer Law. The main
message in the advertisement claimed that the clients would pay for $29.99 for the bundle,

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which if it were true was the most competitive offer when compared to competitors
(Australian Competition and Consumer Commission v TPG internet PTY ltd).
Under this section, people and businesses are forbidden from engaging in conduct that
would be construed as misleading or deceptive. Actions that are likely to be interpreted as
misleading include direct or express statements or representation, behaving in a certain given
manner, implied representation, remaining quiet regardless of a requirement to disclose a
certain relevant issue, or by omission which involves failing to act in a certain manner.
Misleading conduct lead to civil and criminal liability (Competition and Consumer Act 2010
(the Act)).
The conduct of the business teams who are in contact with other businesses, business
stakeholders for example suppliers or creditors, or consumers’ risks contravening with the
specification of section 18 of the ACL (The Australian Consumer Law). The actions must not
necessarily be intentional as there are instances where the conduct was found as misleading
despite not being intentional (Competition and Consumer Act 2010 (the Act)).
Section 29
Covers false or misleading representations about the supply or the possible of goods
or services in regards to promotion (The Australian Consumer Law). The false and
misleading representation include the quality or standard of the goods, claims that the goods
are new, that a particular person has agreed to purchase the goods or services, information
purporting to be a testimonial by a given person, sponsorship, approval, affiliation, the price
of the goods, after sale services, place of origin, among others. The price stated in the
advertisement of $29.99 monthly was misleading as it failed to capture the extra $30 for
rental. Furthermore, initial installation charges were not captured (Competition and
Consumer Act 2010 (the Act)).

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Question 3
Findings of the primary judge were (Australian Competition and Consumer Commission v
TPG internet PTY ltd)
1. The target audience were the consumers who included the first time users of ADSl2+.
In both the initial and the revised advertisements, TPG failed to clearly state that
besides the ADSL2+ product quoted as $29.99 monthly did not include the rental
home phone line which required an additional fee of $30.00 monthly which Judge
Murphy found to be misleading.
2. The consumers were misled by the advertisement as it failed to mention the initial
installation fee required. The dominant message gave the impression that there would
be no other charges.
3. The advertisement was in breach of section 53C of the TPA by failing to state
prominently the single price of the product in all advertisement channels.
Question 4
The full federal court in its ruling was of the view that;
1. The only aspect that was misleading was the fact that the advertisement failed to
adequately disclose the fact that besides the $29.99 monthly there were other involved
costs such as $30.00 for the home phone line rental and the set up fees for the initial
advertisement (Australian Competition and Consumer Commission v TPG internet
PTY ltd).
2. The revised advertisements were not in any way misleading or deceptive in breach of
the TPA for the bundling condition would not be missed for any reasonable person
was aware of the fact that the services normally are offered as a bundle and that the
initial installation fee is required (Australian Competition and Consumer Commission
v TPG internet PTY ltd).

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Question 5
The majority of the high court in the ruling agreed that
1. The full court was erroneous in stating that besides the dominant message other parts
of the advertisement held same significance. Just like the primary judge, the high
court was of the view that assessing the advertisement should be based on the
dominant message (Australian Competition and Consumer Commission v TPG
internet PTY ltd).
2. The full court was wrong in failing to appreciate that the tendency of TPGs’
advertisement to mislead was not in any way reduced by the fact that under normal
circumstances the target audience assumed that ADSL2+ services would be offered as
a bundle (Australian Competition and Consumer Commission v TPG internet PTY
ltd).
Question 6
The case Parkdale Custom Built Furniture v Puxu was in direct contrast with the TPGs case.
1. The aim of an advertisement is capturing the attention of the potential consumer
(Consumers Affairs 2018). In as much as the attention of the target audience was
captured in the $29.99 monthly offer, the consumers cannot be expected to pay close
attention to the advertisement similar to that paid by the judges who were scrutinizing
the advertisement. Here the target audience were not potential consumers who were
focused on the particular purchase in a showroom. The attention given to the
advertisement by the target audience was limited to the dominant message, which was
the most important aspect when making a purchase decision (Parkdale Custom Built
Furniture v Puxu).
2. The message captured in the advertisement was designed in such a manner that would
be erroneous if pursued by the consumer. The full court failed to consider the

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tendency of the advertisement to be misleading not by having people actually enter
into a contract with TPG but it induced them to pursue or engage TPG into a
negotiation rather than the competitors. The failure to disclose all the relevant
information made the target audience base their decision to engage them rather than
the competitor, which in itself was wrong (Parkdale Custom Built Furniture v Puxu).
Question 7
When making the advertisement, the campaign should assess whether the wording has
what would be considered as the dominant message (Australian Competition and Consumer
Commission 2018). If there is indeed a dominant message are other conditions, which affect
the dominant message, articulated clearly and prominently in the campaign (Australian
Competition and Consumer Commission v TPG internet PTY ltd). Rod Sims, chairman to
ACCC, in his analysis of the case ruling stated, " It was held to be a failure to disclose
because, whether it wasn't there or it was just in the fine print, the court found that this was
not the appropriate way to be doing advertising and informing consumers." Where there is an
internet based advertisement, the assumption that the consumer will click on the
advertisement to be redirected to the site for further information is not sufficient grounds for
putting an advertisement with only the dominant message without the associated conditions.
The campaign should capture all the relevant information in terms of costs and benefits
associated with each part of membership (Australia Competion and Consumer Commission
2018).

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Bibliography
Australia Competion and Consumer Commission 2018, Advertising and selling guide, viewed
23 September 2018 https://www.accc.gov.au/accc-book/printer-friendly/2952
Australian Competition and Consumer Commission 2018, False or misleading claims,
Viewed 23 September 2018 https://www.accc.gov.au/consumers/misleading-claims-
advertising
Australian Competition and Consumer Commission v TPG internet PTY ltd (2013] HCA 54
Competition and Consumer Act 2010 (ACT)
Consumers Affairs 2018, Consumers Affairs, Viewed 23 September 2018
https://www.consumer.vic.gov.au/
Parkdale Custom Built Furniture v Puxu [1982] HCA 44
The Australian Consumer Law (Cth)