ACCC v TPG Internet Pty Ltd
High Court of Australia · 2013
ACCC v TPG Internet Pty Ltd (2013) 250 CLR 640
The headline gave one price. The fine print gave the rest of it. Which one is the consumer taken to have read?
What happened?
TPG advertised an ADSL2+ broadband service at a headline price of $29.99 per month. The service was in fact available only bundled with a home telephone service at a further $30 per month, and there were setup and prepayment charges. Those qualifications appeared in the advertisements, but with nothing like the prominence of the headline.
The primary judge found the advertisements misleading. The Full Court of the Federal Court set much of that aside, holding that the primary judge had been wrong to treat the "dominant message" as crucial, and that the target audience could be taken to know that ADSL2+ services are commonly offered as part of a bundle.
What did the Court decide?
The ACCC's appeal was allowed. The Full Court had erred on both points ([45]).
The Full Court's first error was to weigh the advertisements as a careful reader would, having been asked to scrutinise them. Its second was to ask the wrong question about timing: whether the advertisements were apt to induce consumers into contracts, rather than whether they were apt to bring them into negotiation with TPG on a mistaken belief ([48]). Answering that by saying consumers could have informed themselves before signing up "is to confuse the question whether the consumer has suffered loss with the anterior question as to whether the advertisement, viewed as a whole, has a tendency to lead a consumer into error" ([49]).
And on the audience's knowledge, their Honours put it conditionally rather than as a rule. It "may be accepted" that a reasonable consumer who knows bundling is common "might be less likely" to form the wrong impression "if he or she brings that knowledge to bear in a conscious scrutiny of the terms of TPG's offer". What they decided is what follows: that knowledge "was not apt to defuse the tendency of the advertisements to mislead, especially where the target audience is left only with the general thrust or dominant message after the evanescence of the advertisement" ([53]).
Their Honours adopted the primary judge's formulation of the vice: the advertisements required "consumers to find their way through to the truth past advertising stratagems which have the effect of misleading or being likely to mislead them" ([54]).
Proposition
What is the principle?
Conduct is misleading or deceptive "if it has a tendency to lead into error" ([39]), and that tendency is assessed from the advertisement viewed as a whole — for a target audience that will often "only absorb the general thrust" ([54]). Qualifying material does not automatically cure a headline: whether it neutralises the tendency to mislead is itself the question, assessed in context. Liability can arise before any contract is made: it was enough that the advertisements were apt to bring consumers into negotiation with TPG "on the basis of an erroneous belief engendered by the general thrust of TPG's message" ([48]).
Why the audience's inattention was TPG's problem and not its own: "[t]he tendency of TPG's advertisements to lead consumers into error arose because the advertisements themselves selected some words for emphasis and relegated the balance to relative obscurity", and that consumers would absorb only the general thrust "was not a consequence of selective attention or an unexpected want of sceptical vigilance on their part; rather, it was an unremarkable consequence of TPG's advertising strategy" ([51]–[52]).
Why does this case matter?
Because of how wide the finding ran, which is what students most often get wrong about it. TPG gets filed under fleeting media — the television spot gone in fifteen seconds — and the case does not sit there. The primary judge made findings to the same effect about newspaper and other print advertisements, internet advertisements, and public transport, billboard and noticeboard advertising ([24]). The single format he held was cured was the brochure, which consumers would read more carefully ([25]).
So the medium is one of the circumstances, not the trigger. Reaching for this case only when the advertisement is transient, or setting it aside because the reader had time, is reaching past what the Court actually decided.
Exam and application relevance
Identify the audience, and then look at how the advertisement itself is arranged: what it puts forward, what it relegates, and what a person who is not scrutinising it is left with. That is where TPG locates the tendency to mislead. The conditions of encounter matter as context — a spot gone in seconds is a different thing from a brochure, or from the showroom a purchaser can walk around in Parkdale — but they support the analysis rather than supply it.
Do not treat a disclaimer as a rule either way. Qualifying material sometimes means conduct is not misleading at all and sometimes does not, and the question is whether it neutralises the tendency to mislead in the circumstances. Prominence, placement and repetition are among the things that bear on that, not a checklist that settles it.
Finally, do not read the loss point as making consumer behaviour irrelevant. It is relevant: the prohibitions in s 52 and s 18 "were not enacted for the benefit of people who failed to take reasonable care of their own interests" ([39]), and how the audience actually behaves is part of characterising the conduct.
Check your understanding
Your client's advertisement was accurate in every line and nobody who signed up complained. Why might it still contravene the section?