Full Federal Court decision to allow TPG appeal

The Full Federal Court today allowed an appeal in part by TPG Internet Pty Ltd against orders made by Justice Murphy in favour of the Australian Competition and Consumer Commission. TPG appealed Justice Murphy’s orders on liability and relief in relation to TPG’s $29.99 ADSL 2 + Advertising Campaign which ran between 2009 and 2011. Justice Murphy’s orders included a pecuniary penalty of $2 million for false and misleading conduct under the Australian Consumer Law.

The Full Federal Court found that Justice Murphy erred in applying the legal test of whether the advertisements misrepresented the offer and also erred by not giving appropriate consideration of consumers’ knowledge relating to bundling practices and set up charges.

Justice Murphy’s orders relating to the first initial television advertisement were upheld by the Full Federal Court. Justice Murphy’s orders regarding TPG’s contraventions of s.53C, which related to the prominence of the total single price, continue to stand. TPG did not appeal Justice Murphy’s finding that it had contravened section 53C in relation to the initial television advertisement and the Full Federal Court upheld His Honour’s section 53C findings in relation to the first set of website and newspaper advertisements.

The ACCC is currently reviewing the Judges’ reasons. The ACCC will continue to take enforcement action to improve clarity in advertising in the telecommunications industry as a priority.

The parties have been asked to provide additional submissions on penalty and orders in January 2013.

On 4 November 2011 Justice Murphy delivered judgment on liability in this matter in relation to two sets of advertisements for TPG’s $29.99 Unlimited ADSL 2+ plan that formed part of a national campaign. 

The advertisements included TV, newspaper, radio and website advertisements.  The first advertisements ran from 25 September to 7 October 2010.  The second advertisements ran from 7 October 2010 until 29 November 2011.

It was alleged that the headline price of ADSL2+ broadband for $29.99 per month in the advertisements was misleading as a consumer had to also acquire home phone line rental from TPG and at an additional cost of $30 per month. This made a total monthly cost $59.99.

It was also alleged that TPG in both sets of advertisements failed to properly disclose up front charges payable for the bundle of either $79.95 or $129.95, depending on the term of the contract and to prominently display the single price of the plan in the original advertisements ($509.89).

On first instance, Justice Murphy found in favour of the ACCC and  imposed penalties on TPG in the sum of $2 million in respect of its contraventions of sections 53(e), 53(g) and 53C of the TPA and sections 29(1)(i) and 29(1)(m) of the ACL.  The penalty included $600,000 for TPG’s original advertisements and $1.4 million for its amended advertisements.  Murphy also granted the following relief against TPG:
o Declarations
o Injunctions
o Orders for corrective advertising
o An order to maintain a trade practices compliance program until 6 February 2015

On 4 July 2012 TPG filed a Notice of Appeal appealing against the whole of the judgment of Murphy J of 4 November 2012 and all the orders made by Murphy J on 15 June 2012 except for the declaration that the initial television advertisements involved a contravention of section 53C of the TPA. 

The appeal was heard before the Full Federal Court on 12 and 13 November 2012.