Flying low: airline fails to state single total prices
In March 2012, the ACCC filed an application in the Federal Court in Victoria against Air Asia, alleging that it failed to display on its website airfare prices inclusive of all taxes, duties, fees and other mandatory charges, in contravention of section 48 of the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)).
Under section 48 of the ACL, businesses that advertise a part of the price of a particular product or service must also prominently specify a single total price.
The commencement of proceedings follows warnings that the ACCC gave to eight major airlines (including Air Asia) in March 2011, when it notified them that it considered prices displayed on their websites contravened section 48.
On 14 December 2012, the ACCC succeeded in obtaining $200,000 in penalties, significantly lower than the $520,000 to $650,000 it had originally sought (the maximum penalty for each contravention being $1.1M), but higher than the $110,000 Air Asia submitted was appropriate. The ACCC did however fail to obtain the corrective advertising it had sought, with the Court concluding that the making of declarations and imposition of financial penalties was more than sufficient to meet the objectives of section 48.
The penalties add to the ACCC’s haul of penalties, which we wrote about last month. Proposed amendments to the single price provisions of the ACL would exempt restaurants and cafes (see our post here, however there is no Oscar-Uniform-Tango for airlines.
By Hannah Bellwood & Peta Stevenson