Comprehensive Case Study: ACCC vs. TPG Internet Pty Ltd - Law 5

This case study analyzes the legal proceedings of the Australian Competition and Consumer Commission (ACCC) against TPG Internet Pty Ltd, focusing on misleading and deceptive conduct in advertising. The case revolves around TPG's failure to disclose setup fees and hidden costs in their advertisements for internet and telephone services, leading to consumer deception. The assignment examines the contravention of the Trade Practices Act, the judgments of the Federal Court and High Court, and the differing perspectives of the judges on issues such as bundling, setup fees, and single pricing. The analysis includes an examination of how the courts applied the principles of the Parkdale Custom Built Furniture v Puxu case. The conclusion offers advice to a marketing team on transparent advertising practices and the importance of avoiding misleading information to consumers. The document also provides references to relevant legal sources.

Running Head: Law 1
Law

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Answer 1- TPG Internet Pty was a company which provides services related to internet and
telephone connections to the consumers and these connections were given by the company under
the name ADSL2+. Careless and misleading conduct of the TPG provoked ACCC to take legal
action against TPG. Following three issues were addressed by the ACCC in this case:
 Company fails to mention anything about the set-up fee and other cost in the
advertisement published in newspapers and online related to the services provided by the
company.
 Company make false representation related to the cost of services in the advertisement, as
company stated that cost of internet service was $29.99 only.
 Company charge hidden cost from the consumer and failed to disclose fixed cost in the
advertisement. Hidden cost includes set-up fee and telephone charges, which means
consumer had to pay $149.95 instead of $29.99.
Therefore, company fails to meet its promises made in the advertisement and it also engaged in
misleading or deceptive conduct because it recovers hidden cost for the internet connections
from the consumers (Federal Court of Australia, 2012).
Answer 2- The main issue determined by the Court was whether conduct of the TPG can be
considered as misleading or deceptive related to the advertisement published by the TPG. For
determining this issue Court referred two statutory provisions and these sections were Section 52
and 53 of the Trade Practices Act. However, it must be noted that these sections were equivalent
to the section 18 and 29 of the Competition and Consumer Act 2010- schedule 2. Contraventions
of both the sections were stated below:
 TPG was engaged in conduct which was misleading and deceptive or likely to mislead or
deceptive under section 52 of the Trade Practices Act 1974 (Trade Practices Act, 1974).

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 TPG was liable to make false and misleading representations related to the price of the
internet service, and this contravenes section 53(e) of the Trade Practices Act 1974. TPG
was also liable to contravene Clause g of this section by made false or misleading
representation related to the existence or effect of the condition Trade Practices Act,
1974).
Above stated sections were contravened by the company by publishing advertisement related to
the internet service on television, radio, its website, third party internet sites and in newspapers,
and this advertisement contained the statement which reflect that company provide unlimited
internet (ADSL2+) for $29.99 per month. This advertisement reflect that consumers were able to
get unlimited internet broadband service in $ 29.99 per month, but in actual company also
charged some hidden cost and this hidden cost includes:
 Per month Payment to TPG of $59.99.
 Purchase or accompanied telephone line of home with broadband internet service on
rental at an additional cost of $30 per month.
 Payment made to TPG regarding up front charges of either $79.95 or $129.95, on the
basis of terms of the contract (Corones, 2014).
Answer 3- primary Judge gave his opinion on three perspectives which includes Bundling, set
up fee, and single price:
 Bundling- as per the primary Judge, company was under obligation to clearly state any
such effect. It was also the duty of the company to state the exact figure of the services
offered without misleading the consumer and making them pay the cost after taking the
services and also clarify the inclusions of the hidden cost. TPG mislead the consumers by
stating fake amount in the advertisements related to the internet services provided.

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Primary judge further stated, for this purpose targeted audience include those peoples
who does not have high level of knowledge related to the broadband connection or those
person who were first time users of the internet connection (Federal Court of Australia,
2012).
 Set up fee- Primary judge held, set-up fee was charged by the TPG from the consumers
whose connection was less than the period of 2 years, and it was necessary that
consumers must be informed about this cost charged by the company. In this case,
company failed to mention any thing about the set-up fee in the advertisement because of
which consumers can assumed that fee related to set up might be free. Advertisement
only stated about the fee related to internet connection which also mislead the consumers
about the setup fee.
 Single Price- Primary Judge also stated advertisement must state the final price which
was determined after the inclusion of all the costs. In the present case, TPG fails to
mention the final cost of internet connection in the advertisement, instead company state
low cost in the advertisement and afterwards added various additional charges. Therefore,
this was considered as misleading and deceptive conduct.
Answer 4- as per the primary judge, company was at fault because it mislead the consumers by
adding hidden charges in the form of bundling and set up fee, and it also fail to state single price
in the advertisement. Charges for internet connection were stated $29.99 only in the
advertisement, but in actual company charged $149.95 from the consumers.
On the other hand, different approach was used by the Full Court. Full Court stated that in this
case, Consumers was at fault. Consumers must go through the advertisement carefully before

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opting for the services provided by the company. Therefore, Court stated that consumers must be
diligent and careful, and if consumers act carefully then might they not face such issues.
Answer 5: High court provide following two reasons for not adopting the approach of Full Court
in this case:
 Statement used by the Court while providing the reasoning of the Judgment was wrong,
and full Court neutralized the misleading which was not the right method to do so.
 High Court further stated that, Court does not use the principles related to Puxu case in
correct manner.
Answer 6- High Court stated that Full Court failed to apply the principles of Puxu case because
of various reasons. High Court further stated that in case Parkdale Custom Built Furniture v
Puxu, Company mislead their consumers by selling the furniture because of which court stated
that consumers must confirm the reliability of the furniture before buying it. In this case, TPG
was providing internet connection instead of furniture. Therefore, principles of PUXU case was
not applied in this case, and in this company was at fault because it mislead the consumers by
adding up bundling charges and setup fee, and it also fails to mention one price (High Court,
2013).
Answer 7- if I have been employed in the team of marketing of a company which provides
internet services, then I will advise the company to state clear information related to the services
in the advertisement. The most important factor on which I concentrate is to provide clear
information to the consumers and not misleading the consumers. I would further advised the
company that presenting the features of the scheme in the best possible way is not wrong, but
providing wrong information to the consumers is wrong under Trade Practices Act 1974.

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Therefore, while presenting the features related to any scheme it is best to mention the amount of
scheme clearly, and company must not charge any hidden cost.
References:
Corones, S. (2014). Australian competition and consumer commission v tpg internet pty ltd;
[*]forrest v australian securities and investments commission. Viewed at:
http://www.austlii.edu.au/au/journals/MelbULawRw/2014/15.html#Heading31. Accessed on 12th
September 2017.
Federal Court of Australia, (2012). Australian Competition and Consumer Commission v TPG
Internet Pty Ltd (No 2) [2012] FCA 629 (15 June 2012). Viewed at:
http://posh.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2012/629.html. Accessed on 12th
September 2017.
Federal Court of Australia, (2012). TPG Internet Pty Ltd v Australian Competition and
Consumer Commission [2012] FCAFC 190 (20 December 2012). Viewed at:
http://www6.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2012/190.html. Accessed on
12th September 2017.
High Court, (2013). Australian competition and consumer commission v TPG internet Pty ltd
(m98/2013). Viewed at: http://www.hcourt.gov.au/assets/cases/m98-2013/M98-2013.pdf.
Accessed on 12th September 2017.
Trade Practices Act 1974- Section 52.
Trade Practices Act 1974- Section 53.