24 Nov 2011
What's your final price - and where is it? Bundled products and the single price
by Michael Corrigan
To be prominent, a single price needs to strike the attention, be conspicuous, be easily seen or be very noticeable.
Although businesses have been required to display a single price for bundled products since 2009, there’s been little explanation from the courts of how prominently that price must be displayed. We now have a better idea with the decision in ACCC v TPG.
What did TPG’s ads offer?
TPG ran an advertising campaign across various media, including television, radio, internet, billboards and signs above men’s urinals, for its broadband service. The ads offered unlimited ADSL2+ broadband for $29.99, but this was only available if the consumer then bought a home phone service from TPG for a total of $59.99 per month. A set-up fee and up-front deposit were also required.
The ACCC took TPG to the Federal Court, saying these ads were misleading and deceptive. The Federal Court agreed, holding that most (but not all) of the ads conveyed the misleading and deceptive representations that no additional service or monthly charge, or set-up fee, were required. This was because the additional information was not very obvious, or fleetingly visible, or required calculations to be performed by the consumer.
A single price, prominently displayed
The ACCC also alleged that the ads breached the requirement in what was section 53C of the Trade Practices Act (and now section 48 of the Australian Consumer Law) that you can’t just specify the price for a component good or service without also specifying “in a prominent way and as a single figure” the price for those goods or services [emphasis added]. The ads did set out a single figure of $509.89 as the minimum charge, but was it set out prominently?
"'prominent' in s 53C means that the single price is required to stand out so as to 'strike the attention', 'be conspicuous', 'be easily seen' or 'be very noticeable', with the proviso that there is no requirement that the single price be as conspicuous as the specification of the $29.99 monthly charge." [emphasis added]
In all the ads the main message of unlimited ADSL2+ for $29.99 was the dominant one – so, for example in the newspaper ad it was large and in colour, while the single price was much smaller and in white. Even though there is no requirement that the single price be as conspicuous as the dominant message, the ads' presentation meant "it is unlikely the casual but not overly attentive consumer will notice the minimum charge in the context in which it appears".
Lessons for selling your own bundled products
This decision clarifies your obligations to display a single price prominently, and is a useful reminder for your advertising compliance tasks.
Although the test used by the Federal Court is not dissimilar to that already used to determine if a representation is false or misleading, the discussion of the obligation to prominently display a single price is instructive. The casual but not overly attentive consumer is an old friend in this area.
Coming up with a combined single price is increasingly important for clients with multiple pricing menus and options, and the TPG case gives us useful insights into how to avoid some of the traps in that area.
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