Jetstar and Virgin to pay penalties for misleading ‘drip pricing’ practices

23rd March 2017 by admin

In a recent article ([2017] TLQ 27) Tony Cordato talked about how the Australian Competition and Consumer Commission was tackling the problem of ‘drip pricing’ by airlines. Now the courts have taken the matter a stage further.

The Federal Court has ordered Jetstar Airways Pty Ltd (Jetstar) to pay a AUD$545,000 penalty and Virgin Australia Airlines Pty Ltd (Virgin) to pay a AUD $200,000 penalty for breaches of the Australian Consumer Law.

In November 2015, Jetstar was found to have made false or misleading representations about specific advertised airfares on its website in 2013 and its mobile site in 2014. Virgin was found to have made false or misleading representations about specific advertised airfares on its mobile site in 2014.

In imposing the penalty against Jetstar, Justice Foster commented upon the importance of the concept of general deterrence in the imposition of penalties, and noted that the penalty imposed is designed to discourage similar behaviour by others.

According to the ACCC Jetstar and Virgin’s ‘drip pricing’ conduct drew consumers into an online purchase process with a headline price, but failed to provide adequate disclosure of additional fees and charges that are likely to apply

[Source: ACCC, 7 March 2017]

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