Read The Times Australia

Daily Bulletin

Jetstar and Virgin caught out for overlooking mobile commerce

  • Written by: The Conversation Contributor
imageJetstar's website was found to be misleading and deceptive.Mick Tsikas/Reuters

This week’s successful prosecution of airlines Jetstar and Virgin Australia by the Australian Competition and Consumer Commission comes after the regulator warned it would crack down on drip pricing.

The Federal Court found both airlines had contravened sections 18 and 29 of Australian Consumer Law by drip pricing, and while the airlines now avoided the practice on their websites, their mobile sites failed to keep up.

Drip pricing is the practice of disclosing only incrementally the various fees and charges consumers must pay. Typically these take the form of booking fees, or fees for using credit cards, that are revealed only when the consumer has reached the end of their online purchase. Especially when associated with a seductively attractive headline price, this practice misleads consumers about the true cost of the transaction. It also distorts the competitive process by disadvantaging those firms that do not mislead consumers in this manner.

Although sometimes the additional costs involve seem minor when compared with the total cost of the transaction, this is not always the case. For example, using Jetstar’s website before May 2013, a listed fare of A$49 would have cost a consumer booking the fare using a non-Jetstar branded credit card a total of A$66. This represents almost 35% more than the headline price - something to which consumers were not alerted until they had reached the payment stage of the booking process.

imageWatch the fine print.Alan Porritt/AAP

The present case concerned the websites, mobile sites and email communications of both Jetstar and Virgin. In the case of Jetstar, the Court found that its website in May 2013 contravened the misleading or deceptive conduct and false representation provisions of the ACL. Both Jetstar and Virgin’s mobile sites were also found to contravene the ACL.

However, the Court found that neither Jetstar’s nor Virgin’s current websites did so because early in the booking process they now include (no doubt influenced by the ACCC’s vigilance) an “explicit disclosure of the existence of the booking and service fee and of its quantum”. The effect of these disclosures is to prevent those sites from misleading consumers or making false representations.

On the other hand, their mobile sites were found to have contravened the law because they did not do this. Rather, the consumer needed to undertake what (when referring to Virgin’s site) the judge described as “a series of relatively annoying steps … to ascertain the existence of the booking and service fee” and when it would be charged.

The morale of this case for online sellers is clear: if they wish to charge consumers more than their headline price they must make this very clear to them and do so very early in the purchasing process, both on their websites and mobile sites. If they do not, they are likely to contravene sections 18 and 29 of consumer law.

However, taking this step will give sellers protection only in relation to those provisions. If the total price that a consumer must pay for a product or service is divided into components, such as a fare + a booking fee, then they need to also be alert to the operation of section 48 of the law. This prohibits what is often referred to as “component pricing” - effectively disguising the actual cost by dividing it into a number of components. Importantly, the Act requires the supplier to prominently specify what the consumer is required to pay as a single amount.

The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

Authors: The Conversation Contributor

Read more http://theconversation.com/jetstar-and-virgin-caught-out-for-overlooking-mobile-commerce-50907

Business News

The Rise of Digital Marketplaces in the Australian Trade Sector

For decades, the Australian trade and construction sector operated almost entirely on word-of-mouth recommendations and local community networks. Small business owners typically relied on local newspa...

Daily Bulletin - avatar Daily Bulletin

How Immigration Lawyers Can Help

Introduction Visa decisions can shape employment, family life, study plans, travel, and future residence. A small omission can lead to delay, added expense, or refusal. Immigration lawyers assess l...

Daily Bulletin - avatar Daily Bulletin

How Industrial Drying Equipment Supports Efficient Processing

Many industrial processes require moisture to be removed from compressed air, products or process materials before they move to the next stage. Excess moisture can affect equipment performance, produc...

Daily Bulletin - avatar Daily Bulletin

Practical Ways a Whiteboard Can Improve Workplace Communication

Effective communication helps teams stay organised, share ideas and keep track of important information. While digital tools are now common in many workplaces, a whiteboard continues to provide a simp...

Daily Bulletin - avatar Daily Bulletin

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Business Case for Choosing Australian Fabricators Over Imported Alternatives

For a long time, you might have defaulted to overseas suppliers when sourcing fabricated metal components for a project. The unit price was lower on paper, and the maths seemed straightforward. That...

Daily Bulletin - avatar Daily Bulletin

Australian organisations are relying on business continuity plans built for a far more predictable world

Tariff escalations, supply chain fragility, geopolitical events, and the ongoing threat of cyber disruption have reshaped the risk environment facing Australian organisations. The problem is that ma...

Daily Bulletin - avatar Daily Bulletin

How to Rent a Car for Uber in Melbourne: What Every New Driver Needs to Know

Starting out as an Uber driver in Melbourne is not as complicated as it sounds but getting the vehicle right is where most new drivers get stuck. Uber has strict requirements around vehicle age, condi...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

How Wide Should Running Shoes Be? Signs Your Shoes Are Too Narrow

Running shoes should be wide enough for the forefoot and toes to sit naturally under load, but not...

Trail Running Shoes vs Hiking Shoes: Which Is Better for Australian Trails?

Australia does not offer one neat definition of a “trail.” A weekend walk might mean a hard-packed...

Architectural Window Shading: Solutions for Triangle Blinds, Raked Glazing, and High Ceilings

Mastering Light and Privacy with Specialized Window Coverings Modern architectural de...

From Suburban Streets to Modern Events: Why Australians Still Love the Ice Cream Truck

Did you know Australia consistently ranks among the world's highest ice cream-consuming countries? ...

Will These Bloody Kids Ever Move Out? The Resurrection of the Duplex Says No

Whilst Baby Boomers and Gen Xer’s typically finished school, got a job and moved out of home relativ...

Critical Structural Checks to Prioritise Before Renovating an Older Property

The Australian home renovation market is experiencing unprecedented growth. The total value of thi...

Why Regular Gutter Cleaning Northern Beaches Is Important

Living in the Northern Beaches offers beautiful coastal scenery, fresh air, and leafy surroundings...

Double Glazed Sliding Doors vs Standard Sliding Doors: Key Differences

Sliding doors are a popular choice in modern homes due to their space-saving design and ability to...

How to Plan a Bathroom Renovation Timeline (Without Surprises)

A bathroom renovation rarely feels “small” once work begins. Even modest updates involve multiple ...