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TPG Advertisements

Question:

Describe about the TPG advertisements.

Answer:

In the TPG advertisements that were considered as defective by the ACCC, it was mentioned in the headlines that the company was offering broadband Internet ADSL2+ services to its customers for a price of $29.99. But in the fine print, it was mentioned in these advertisements that qualification was attached with the price that was mentioned in the headlines due to the fact that the consumers were offered these services only if they were joined with the home telephone service provided by TPG Internet and the consumers will have to pay extra charges of $30. At the same time, the consumers have to give a commitment of at least six months. Similarly the consumers were required to pay a fee of $129.95 and also $20 as the telephone charges. Under these circumstances, the Commission thought that these announcements were misleading for the consumers.

The Commission alleged that the advertisements issued by the TPG Internet had breached section 52, Trade Practices Act, 1974. These provisions require that in trade or commerce, the conduct of corporations should not be deceptive or misleading. The Commission alleged that in this case, these advertisements were misleading in nature. This was claimed by the Commission on the ground of the difference that existed in the headlines where it was mentioned that broadband Internet services were being offered to the consumers at an attractive price but there were certain conditions qualifying this offer that were mentioned in fine print. It was also alleged by the commission that the company has breached section 53C(1)(c) because some of the advertisements did not mention the price that the consumers were going to pay for these services prominently and in a single figure.

In this case, the findings of the primary judge were that the ACCC was correct in its allegations and as a result, several orders were made by the against the company as well as the imposition of a penalty of $2 million on the company. 

Regarding the issue of bundling, it was stated by the primary judge that new users were also part of the audience of these advertisements. But due to the wide range of Internet options that are available to consumers, it is not possible to presume that a starting assumption will be present on part of the consumers if they offered made by the company was regarding separate or bundled services. As a result, the consumers cannot rely on the advertisement for the purpose of receiving information regarding the services that were offered to them by the company. 

In case of the matter of setup fee, it was accepted by the trial judge that usually the consumers have to pay for broadband contracts, especially if the contract is for less than 24 months and as a result, the target users can be expected to be aware of this fact. But due to the dominant message given by these advertisements, an impression has been created on the consumers that they will not have to pay any of the charges and consequently, it was required that these advertisements should have clearly qualified the message by specifying that additional fee will have to be paid by the customers. 

In case of the issue of single price, the conclusion of the primary judge was that the particular price of $509.89 was not prominently stated in these advertisements even if it is required by section 53C(1)(c) in the advertisements issued by the company in the beginning however the commission has not made any objection in this context regarding the advertisements that were issued by the company later on. 

A difference was present in the approach adopted by the Full Court as compared to the approach adopted by the primary judge while deciding the issue if the TPG advertisements can be considered as misleading. Although it has been mentioned by the Full Court that it had agreed with the fact that some of the audience of these advertisements could have been less concerned with broadband Internet that are provided with whom telephone and similarly, it also stated that the number of consumers with fixed telephones are also declining, particularly the customers between 18 and 22 years of age. But the difference in the opinion of the Full Court from that of the primary judge was that the prevailing message of these ads was very important for the purpose of deciding if they advertisements have misled the consumers or not. The Full Court mentioned the statement made in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd. (1982) HCA 44 that when impugned time consisting words, it will not be appropriate to rely upon only some of these words and overlook others for providing context which gives the meaning of the selected words. 

According to the High Court, an error was made by the Full Court when it stated that the primary judge was wrong when it considered the main message of the advertisements as being very significant. At the same time, it was also mentioned by the High Court that the Full Court had erred when it did not notice that it was the tendency of the TPG advertisements to mislead the consumers and moreover, this tendency was not offset due to the fact that the Full Court had attributed knowledge to the target consumers that ADSL2 services are generally presented as a package. 

The High Court pointed out the words the main difference is that existed in this case and the decision given in Puxu. First of all, the Court noted that the target audiences of these advertisements were not the potential purchasers who focused on the subject matter of the purchase in the peaceful environment of a showroom and also have the substantial purchase in their minds. On the other hand, in this case it can be considered that the advertisements were in fact an intrusion into the consciousness of the consumers. The purpose of these advertisements was to attract the attention of the consumers. However, while this purpose was achieved by these advertisements, the court also noted that it was possible that the target audience would not have paid concentration to these advertisements. Therefore, a number of people will only grasp the general thrust of these ads and not the complete message.  

While launching an advertising campaign for promoting an attractive plan that has several parts of costs and benefits, and the marketing department of the fitness center is required to consider several things. The marketing section is required to consider if the consumers have understanding of the bundling practices that are prevailing in the fitness industry and if this awareness can be treated as sufficient for defusing the inclination of the advertising campaign to mislead the consumers. The marketing section is also required to make sure that the advertisements are not of the nature in which the target audience only receives the dominant message. Similarly, it also needs to be made sure that in case of these advertisements, all parts of the plan offered to the consumers, are given similar importance in these advertisements and the costs and benefits of all these parts must be similarly highlighted. 

Reference 

Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54.

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