Misleading and Deceptive Advertisements: ACCC v TPG Case Study

This article discusses the case of ACCC v TPG, where TPG was accused of misleading and deceptive advertisements. It covers the facts of the case, ACCC's allegations, TPG's defense, and the court's decision. It also discusses the remedies available for consumers and the consumer guarantees under the Australian Consumer Law.

Running head: COMMERCIAL AND CORPORATION LAW
Commercial and corporation law
Name of the Student
Name of the University
Author Note

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Table of Contents
The facts of the case: ACCC v TPG................................................................................................2
ACCC’s strong grounds to allege TPG throughout the proceedings:..............................................4
The advised defense of TPG:...........................................................................................................5
Subsequent message to the advertisers and consumers...................................................................6
Bait advertisement...........................................................................................................................6
Breach of section 18 and 29 of Australian consumer Law..............................................................7
Remedies for misleading or deceptive advertisements:...................................................................9
Consumer Guarantee.......................................................................................................................9

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The facts of the case: ACCC v TPG
TPG Internet Pty Ltd (or TPG) started a national print media campaign regarding its
unlimited ADSL2+ and home phone packages. Along with the print media campaign, it added
television, radio and online campaign advertisement. The Australian Competition and Consumer
Commission (ACCC) called out to TPG pointing out that the advertisement campaign of the
company was deceptive and misleading, and such advertisement is infringing the provisions of
Trade Practice Act (TPA) at that time, now changed to Competition and Consumer Act (CCA).
This action of ACCC compelled TPG to change the campaign which had run for 13 days. The
company changed the advertisement which was spread to the consumers through even bigger
platform like newspapers, magazines, radio ads, cinemas, outdoor ads (such as hoardings,
billboards, trams and buses) and through the internet (Corones 2014).
The High Court intervened on the second advertisement which allured consumers with an
offer of “unlimited ADSL2+$29.99”. This offer had a significant annexure to it which said that
the unlimited ADSL2+ service was only available with an additional package of home phone
rental for $30. ACCC brought the charges against TPG for alluring consumers by false message
which is likely to deceive the consumers. The consumers were in the impression that they would
only be paying $29.99 dollar for the unlimited ADL2+, while they would actually be liable to
pay $29.99 + $30 = $59.99 for the offer per month. This deceptive advertisement of TPG was
sufficient to prove the case in favour of the allegations of ACCC (John and Willekes 2014).

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First proceeding:
TPG claims to revise its first advertisement, replacing it with the second, which again
was held misleading by the ACCC. The Commission disapproved of the second campaign as
well and filed for an interlocutory injunction to restrict the company from disseminating the
misleading campaign further. However, in Australian Competition and Consumer Commission v
TPG Internet Pty Ltd [2010] FCA 1478 Ryan J dismissed ACCC’s plea by stating that the
commission’s allegation was weak. TPG had made a calculation of monthly package in one of its
alternative precautionary advertisement, which later proved of its deceptive actions.
Second proceeding:
On appeal, the suit of Australian Competition and Consumer Commission v TPG Internet
Pty Ltd [2011] FCA 1254 proceeded to the High Court for the final order which was heard by
Murphy J. The court held that it needed to compare and analyse the statement of the first
campaign with the second one to determine the allegations of ACCC. The court pointed out the
breach of section 52, 53(e), 53(g) and 53C of the then Trade Practices Act (now, sections 18,
29(1)(i) and 29(1)(m) of Australian Consumer Law contained in the schedule 2 of Competition
and Consumer Act).
Court’s decision in the second proceeding:
Murphy J held that:

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 TPG had mislead and deceived the consumers by suppressing facts about the
advertisement, in both first and second one, as it did not mention that the consumers are
supposed to spend $59.99 for the unlimited ADSL2+ and an additional subscription to
home phone line rental on monthly basis.
 TPG misled the consumers by not disclosing about the set-up fee that was supposed to be
paid for TPG service in the first advertisement.
 TPG violated section 53C of the Trade Practices Act as it purposely skipped to disclose
the single price of a product specifically, in the advertisements.
Third proceeding:
Before Murphy J, a separate proceeding for penalty was directed. In this hearing, the
court ordered an injunction restricting TPG from using the first and the second advertisement.
The company was penalized with a pecuniary compensation of $2 million. The court also
directed TPG to run a correct campaign to promote and market its products that does not deceive
people (Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2)
[2012] FCA 629).
ACCC’s strong grounds to allege TPG throughout the proceedings:
 ACCC have strong grounds to allege TPG, starting from the first or initial campaign.
They are of the view that TPG’s advertisement was dominantly highlight the message of
“unlimited ADSL2+ for $29.22” which was misleading and deceiving as the offer was
not just limited to the ADSL2+, but had an additional home phone rental line that costs

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$30. The ADSL2+ part was in bigger fonts while the additional home phone-line clause
was in smaller fonts, which a person would generally ignore to read.
 ACCC added to the argument that a consumer would not have an idea pertaining to the
nature of the ADSL2+ service, which the company chose to ignore to mention in the
advertisement, yet clubbed the offer along with a ‘bundle’ or package that includes home
phone line.
 ACCC argued that a penalty of $50000 was not a sufficient deterrent punishment in terms
of refraining companies from giving such misleading and deceiving advertisement, which
makes the consumers suffer.
The advised defense of TPG:
On the decision of Murphy J, TPG appealed (TPG Internet Pty Ltd v Australian
Competition and Consumer Commission [2012] FCAFC 190) against such decision. It was again
held by the Court that the company had misled consumers by not disclosing the material fact
about the advertisement, which has the potentials to economically injure consumers and shake
their trust on the company. TPG defended itself by stating that:
 The campaigns needed to be assessed from the perspective of its context, not from the
point of a dominant message only.
 It was common for the targeted consumers pertaining to the campaigns to know that an
ADSL2+ connection is always bundled with a phone line connection. Therefore, the
express mention of the bundle offer was redundant.

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 The penalty of $50000 was excessive, as the company had already incurred an additional
cost to contact the consumers for offering them a refund.
Subsequent message to the advertisers and consumers
 The advertisers are advised regarding the usage of disclaimers in advertisements to
highlight headline messages. The court alerted advertisers to assess the dominant
message or the main thrust of the advertisement and carefully draft the additional clauses,
which are to be conveyed through the ‘terms and conditions’ section.
 Advertisers are advised not to put trust on the knowledge of the consumers to judge that
they are capable of understanding a latent meaning or clause to a certain advertisement as
it is irrational to accept that the intellect of every person is one and same. It is to be
assumed by the companies that an ordinary reasonable consumer would possess no
professional knowledge of a commercial product.
 Ambiguous or alternative version of advertisement can be taken for an evidence against
the advertiser for misleading or deceptive advertisement.
 Penalties for non-compliance of the consumer law would be of deterrent nature, which
would stop companies from circulating deceptive advertisement for commercial gains.
Bait advertisement
Advertisers can be imaginative while circulating advertisements and campaigns for
promoting and marketing their products, however, they must not mislead or deceive the
consumers with false expectation and wrong goods or services as it would be unethical and
illegal. In some cases, advertisers offers a particular sale price of a product, which turns out to be

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unavailable or available in limited quantity. This is a clear example of bait advertisement when
sellers allures consumers to approach them for buying the product while the seller would try to
convince the buyer to opt for another one at a higher price. However, it is held that it would not
be misleading or deceptive on the sellers’ part if they expressly mention that the advertised
product has a limited stock of supply (Kupke, Rossini and Kershaw 2014).
In this case, there is a clear picture of bait advertisement, which is alluring consumers to
approach TPG for buying the ADSL when they are being pushed to buy the home phone along
with it as a mandate. This is a misleading advertisement which is unethical and harassing the
consumers greatly. Therefore, such bait advertisements should be screened and the advertiser
should be penalized.
Breach of section 18 and 29 of Australian consumer Law
Section 18 of the Australian Consumer Law (ACL) refrains companies from engaging in
misleading and deceptive conduct, which is likely to mislead or deceive a man of ordinary
prudence for commercial gains. While section 29 of ACL lays down detailed provisions for
‘false and misleading representations regarding goods or services. Section 18 has a generalized
approach regarding misleading or deceptive conduct in trade and commerce, while section 29
lays down an elaborative discussion regarding false and misleading representation about goods
and services provided by a seller to a consumer. In nutshell, it prohibits sellers to promote a
product with false promises regarding the standard and quality of the goods and services.
Infringement of the provision attracts pecuniary penalty to the offender (Maicibi and Abdullahi
2013). In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd, it was held that a test to

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judge a conduct whether misleading and deceptive or not, it is to be determined whether such
conduct leads people into error.
The sections are differentiated based on two factors:
Section 18
a) Person engaged in conduct:
Where a person engages orally or in writing for doing something or offering something to
another, which can also include silence.
b) Person engaged in trade or commerce:
Such conduct can be interpreted as trade or commerce when it has a commercial aspect
attached to it; some commercial gain or loss is involved (Pacific Dunlop v Paul Hogan
and ORS)
Section 29
a) False or misleading representation:
False promise or representation is a factor in this provision, which may not lead to
deception or fraudulent advertisement to defeat consumerism always.
b) False representation regarding goods and services:
Such false representation involve sale of goods or services.

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Remedies for misleading or deceptive advertisements:
There are various remedies available for consumers who are deceive through false promises
and misleading advertisements. Defenses like:
 Injunction:
Consumers can approach the court to give an injunction to companies who is deceiving
consumers with its false representation.
 Refund and additional damages:
Consumers can claim refund of the price paid for the goods or services and may claim
damages from such deceiving companies for injuring them financially through such false
representations.
 Replace of goods or services:
In case the goods or service is of such nature that it can replaced, consumers may claim
for a replacement of a defective product or faulty service.
Consumer Guarantee
The Australian Consumer Law (under Schedule 2 of the Competition and Consumer Act
2010) lays down certain consumer guarantees, which protects consumers from being likely to be
misled and deceived (Paterson 2013). Provisions for consumer guarantees relating to the supply
or goods and services, and contracts are laid down under division 1 of Part 3-2 of the Australian
Consumer Law. These guarantees protect consumers from misleading commercial activities in
every industry (Legislation.gov.au 2018).

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References:
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2010] FCA 1478
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2011] FCA 1254
Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2) [2012] FCA
629
Australian Competition and Consumer Commission. (2018). High Court reinstates $2m penalty
against TPG. [online] Available at: https://www.accc.gov.au/media-release/high-court-
reinstates-2m-penalty-against-tpg-0 [Accessed 6 Oct. 2018].
Competition and Consumer Act 2010
Corones, S., 2014. Australian Competition and Consumer Commission v. TPG Interney Pty Ltd.,
Forrest v. Australian Securities and Investments Commission: Misleading Conduct Arising from
Public Statements: Establishing the Knowledge Base of the Target Audience. Melb. UL Rev., 38,
p.281.
John, R. and Willekes, A., 2014. Consumer law: Deceptive advertising: Is it a question of
audience?. Law Society Journal: the official journal of the Law Society of New South Wales,
52(3), p.42.

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Kupke, V., Rossini, P. and Kershaw, P., 2014. Bait pricing: evaluating the success of regulatory
reform in advertising. International Journal of Housing Markets and Analysis, 7(3), pp.333-345.
Legislation.gov.au. (2018). Competition and Consumer Act 2010. [online] Available at:
https://www.legislation.gov.au/Details/C2017C00369/Html/Volume_3 [Accessed 7 Oct. 2018].
Maicibi, N.A. and Abdullahi, Y.S., 2013. Criminal and Unethical Behaviours in Organisations:
Misuse of Assets and False or Misleading Advertising. Global Journal of Human-Social Science
Research.
Pacific Dunlop v Paul Hogan and ORS 1989 FCA 250.
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd - [1982] HCA 44
Paterson, J.M., 2013. Developments in consumer protection law in Australia. Legaldate, 25(2),
p.2.
The Australian Consumer Law (Schedule 2 of Competition and Consumer Act 2010)
TPG Internet Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 190
TPG Internet Pty Ltd v Australian Competition and Consumer Commission (No 2) [2013]
FCAFC 37

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