Drip Pricing Follow Up

Posted on: 9th March, 2017

Leanne Jezercic |

9 March 2017 |

A little while back we published an update about an important ACCC investigation into Jetstar and Virgin airlines regarding their practice of ‘drip pricing’ http://anisimoff.com.au/publication/ljnov15/ – you may be familiar with this practice already, but it is common in the airline industry whereby you see an advertised ‘headline’ price for a flight that ends up being too good to be true as it quickly inflates once you add on unavoidable fees, taxes and charges.

At the time of our last update on this issue, the ACCC had just succeeded in establishing that the practice of drip pricing was indeed misleading in some circumstances but the orders and penalties were postponed for a further hearing. Recently, the Federal Court set out its penalty orders against Jetstar and Virgin, to pay $545,000 and $200,000 respectively for breaches of the Australian Consumer Law in its pricing practices. In doing so, the Federal Court was clearly sending a message to discourage similar behaviour by others.

In light of these hefty penalties, we again remind our clients and our client’s clients, especially those that use internet platforms and apps to sell to consumers, of the need to ensure that all fees and charges above the advertised headline price are prominently disclosed to the consumer as early as possible in a booking or transaction process, to avoid breach of the Australian Consumer Law.

We recommend flicking over our previous update through the link above and letting us know if you have any questions on this. There are around 545,000 reasons to get pricing matters right and avoid an ACCC investigation, as the Federal Court has just shown us.