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ACCC v Jetstar / Virgin – Federal Court orders penalties for ‘drip pricing’

On 7 March 2017 the Federal Court of Australia ordered airlines Jetstar Airways Pty Limited and Virgin Australia Airlines Pty Ltd to pay $545,000 and $200,000 in pecuniary penalties respectively for ‘drip pricing’ practices in contravention of the Australian Consumer Law (ACL).

What is ‘drip pricing’?

The Australian Competition and Consumer Commission (ACCC) defines drip pricing as the act of advertising a headline price at the beginning of an online purchasing process and then incrementally disclosing (or ‘dripping’) additional fees and charges which may be unavoidable. This can result in consumers paying more than the advertised price or spending more than they realise.

In relation to drip pricing the ACCC Chairman, Rod Sims, has said:

The ACCC is concerned about advertising that draws consumers into an online purchase process but fails to provide sufficient upfront disclosure of additional fees and charges that are likely to apply.

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