Misleading Pricing Under Australian Consumer Law

Misleading Pricing in Australia: Legal Overview

Misleading pricing under Australian Consumer Law is one of the most common compliance risks facing businesses that advertise prices, discounts, or service fees in Australia.

Businesses often assume that compliance turns on whether a stated price is technically accurate. However, the Competition and Consumer Act 2010 focuses on whether pricing conduct, viewed as a whole, creates a misleading or deceptive impression about what a consumer will actually need to pay.

This issue commonly arises in the context of hidden fees, drip pricing, delayed disclosures, and qualifications that only become visible after a consumer has already engaged with a transaction.

In practice, a price may be numerically correct and still give rise to liability if the overall impression created by the pricing representation does not accurately reflect the true cost of acquiring goods or services.

This reflects the broad operation of s 18 of the Australian Consumer Law, contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth), which focuses on whether conduct is misleading or deceptive, or likely to mislead or deceive, rather than on the trader’s subjective intention.

This approach was clearly illustrated in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54, where the High Court considered whether a prominent headline price was undermined by less visible qualifying terms.

The Court stated at [3]:

the advertisements were misleading and deceptive by reason of the disparity between the prominent headline offering TPG’s ADSL2+ service at an attractive price and the less prominent terms qualifying that offer.

This principle continues to shape how courts assess misleading pricing, hidden fees, and pricing disclosures across industries including eCommerce, telecommunications, travel, and subscription services.

What is Misleading Pricing Under Australian Consumer Law?

Pricing is one of the most immediate and influential representations a business makes to consumers, and it is often the first factor shaping a purchasing decision.

The Australian Consumer Law recognises this by imposing strict obligations on how prices are presented, ensuring that consumers are not misled by incomplete, unclear, or strategically framed information.

The Statutory Provision

Misleading pricing is principally regulated by the Australian Consumer Law, contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth), which establishes broad rules governing how businesses must deal with consumers.

At its core, the law prohibits businesses from presenting information in a way that creates a false or misleading impression about price.

This applies not only to statements that are outright false, but also to situations where information is technically correct yet presented in a way that misleads consumers.

For example, advertising a product at a low headline price while omitting unavoidable fees until later in the purchasing process may still breach the law, even if those fees are eventually disclosed.

The legislation draws an important distinction between two types of conduct.

The first is general misleading conduct, which captures any behaviour that is likely to mislead or deceive consumers in a commercial context.

The second is more specific and targets representations about price, including situations where a business gives a misleading impression about how much a consumer will actually need to pay.

In practice, these provisions often operate together.

A pricing strategy that obscures the true cost of a product or service may fall within both categories, particularly where additional charges are not clearly disclosed upfront.

Importantly, the law does not require proof that a business intended to mislead anyone.

A contravention can arise simply because the overall impression created by the pricing is misleading.

This reflects the protective purpose of the legislation, which focuses on how consumers are likely to understand the information presented to them.

How Courts Assess Pricing Representations

Courts do not assess pricing statements in a narrow or technical way.

Instead, they consider the overall impression created by the conduct as a whole, including what is emphasised, what is downplayed, and how information is presented to consumers in context.

This means that a pricing representation cannot be “saved” simply because all relevant information appears somewhere within the advertisement or transaction process.

A key concept in this analysis is that consumers tend to focus on the most prominent aspects of a representation, particularly headline prices or bold claims, rather than carefully analysing qualifications or fine print.

Where there is a mismatch between what is prominently conveyed and what is disclosed later or less clearly, the dominant impression may still be misleading.

This principle is illustrated in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2011] FCA 1254, where the Court examined whether qualifying information was sufficiently clear and prominent to correct an otherwise misleading pricing message.

The Court stated at [6]:

the ACCC alleges that TPG represents in each of the advertisements that the Unlimited ADSL2+ broadband internet service could be acquired at a cost of $29.99 per month: (a) without obligation to acquire any additional service; (b) without obligation to pay any additional monthly charge; and (c) without obligation to pay any up front charges.

Courts also recognise that consumers do not approach advertisements with a high degree of scrutiny.

The law instead asks how an ordinary or reasonable member of the relevant audience would understand the pricing in the circumstances in which it is presented.

This includes taking into account the medium of communication, such as television, online platforms, or mobile interfaces, as well as the speed at which information is conveyed and the practical realities of consumer behaviour.

As the High Court explained in Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60, the assessment depends on whether the conduct, viewed in context, conveys a misleading representation to its audience rather than on whether each individual component is technically accurate.

Taken together, these principles mean that pricing representations are evaluated holistically.

A business may therefore contravene the Australian Consumer Law even where all relevant information is disclosed, if the way that information is presented creates a misleading impression about the true price payable.

Common Misleading Pricing Practices Under Australian Consumer Law

Pricing practices rarely involve outright false statements.

More often, risk arises from how prices are structured, presented, and qualified in real commercial settings.

The following categories reflect recurring areas where courts and regulators have identified misleading conduct under the Competition and Consumer Act 2010.

The Australian Consumer Law also requires a business that represents only part of a price to prominently specify a single price, where the single price is quantifiable at the time of the representation.

Hidden Fees and Mandatory Charges

Hidden fees are one of the most common sources of misleading pricing risk.
These typically arise where a headline price is presented to consumers, but additional charges must be paid to complete the transaction.

Examples include booking fees, service charges, administration fees, processing costs, and mandatory delivery fees.

The legal issue is not usually the existence of the fee itself, but whether the pricing creates a misleading impression about the minimum total price payable, or whether the fee is disclosed too late or too obscurely for consumers to understand the real cost.

Risk increases where the additional charge is unavoidable and is disclosed only after the consumer has engaged with the purchasing process.

In Australian Competition and Consumer Commission v Virgin Australia Airlines Pty Ltd (No 2) [2017] FCA 204, the Court addressed a pricing representation where an advertised airfare did not include a compulsory booking and service fee.

The Court declared at [1]:

the respondent (Virgin Australia) contravened ss 18, 29(1)(i) and 29(1)(m) of the Australian Consumer Law by making representations on its mobile website … that the price it would charge for air passenger services … would be from $85 per person without adequately disclosing until the very end of the booking process that … [a] Booking and Service Fee … [was payable].

This demonstrates that even relatively small additional charges may be misleading if they are not disclosed at the point where the consumer forms their understanding of price.

Drip Pricing

Drip pricing refers to a practice where a business advertises a base price and then reveals additional mandatory charges progressively throughout the transaction.

This is particularly common in online booking systems, subscription services, and ticketing platforms.

The concern is that consumers are drawn into a transaction by an attractive headline price and only later discover that the total cost is higher than initially represented.

Courts have treated drip pricing as potentially misleading where additional fees are not adequately disclosed early enough in the purchasing process, particularly where consumers are drawn in by a headline price before learning that further charges apply.

In Australian Competition and Consumer Commission v Jetstar Airways Pty Limited [2015] FCA 1263, the Court considered allegations that airline fares were presented without adequately disclosing compulsory booking and service fees.

The Court observed at [8]:

the ACCC’s complaint is that both Jetstar and Virgin advertised and promoted airfares for sale at a prominent headline price without adequately disclosing to potential customers that they would be required to pay a booking … fee.

This reflects the broader principle that disclosure must occur at a time and in a manner that allows consumers to understand the true price before committing to the transaction.

“Was/Now” and Discount Pricing

Discount pricing presents a different type of risk. This includes representations such as “was $100, now $50” or “50% off”.

These claims may be misleading where the reference price is not genuine or where the discount is not real in a practical sense.

Examples of risk include artificially inflating a price before a sale, using a reference price that was never widely charged, or maintaining a “discount” for extended periods that undermine its authenticity.

The legal issue is whether the representation creates a false impression about the value or savings being offered.

Courts assess whether the comparison being made is meaningful and reflects real market conditions.

Where the comparison is artificial or contrived, the pricing may be misleading even if the numerical statements are technically correct.

The ACCC’s current guidance indicates that a “was/now” or sale price may be misleading if the product was not sold at the higher price for a reasonable period immediately before the sale, only a very small proportion of items were sold at that price, or the “sale” price has effectively become the normal selling price.

Fine Print and Disclaimers

Businesses often attempt to manage pricing risk by including disclaimers or qualifying information in fine print.

However, disclaimers will not necessarily prevent a contravention if they do not effectively correct the overall impression created by the headline representation.

The law requires that qualifying information be sufficiently clear, prominent, and timely to counteract any misleading impression.

If the dominant message conveyed to consumers is misleading, it may not be cured by conditions that are difficult to locate, read, or understand.

This principle was central to the reasoning in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2011] FCA 1254, where the Court considered whether additional charges and conditions were adequately disclosed in advertising material.

The Court stated at [7]:

the ACCC contends that these representations are misleading and deceptive because in fact Unlimited ADSL2+ is only offered by TPG at a cost of $29.99 per month with an obligation to also … pay an additional $30 per month … and … pay upfront charges comprising a setup fee.

This illustrates that the presence of qualifying information is not determinative.

What matters is whether the overall presentation leaves consumers with a misleading understanding of the true price.

When Do Hidden Fees Become Misleading Pricing?

Not all additional charges will give rise to a contravention of the Competition and Consumer Act 2010.

The critical issue is whether the fee is presented in a way that prevents consumers from understanding the true price at the point they form their purchasing decision.

In practice, whether a fee is “hidden” is a question of impression, assessed by reference to how and when the information is disclosed.

Courts do not apply a rigid rule. Instead, they evaluate a combination of factors to determine whether the pricing conduct is misleading.

Timing of Disclosure

A central consideration is when the additional fee is disclosed to the consumer.

If a mandatory charge is only revealed after the consumer has already engaged with the transaction, there is a real risk that the earlier representation of price was misleading.

This is particularly relevant in online environments, where consumers may progress through multiple steps before discovering the full cost.

In Australian Competition and Consumer Commission v Jetstar Airways Pty Limited [2015] FCA 1263, the Court identified that the proceeding concerned whether airlines represented that fares were fixed when, in fact, additional fees applied.

The Court stated at [2]:

the airlines also stand accused of making false representations in connection with the sale of such travel services.

This reflects the principle that a representation about price is assessed at the time it is made, not merely by reference to information disclosed later in the transaction.

Visibility and Prominence

The way in which a fee is presented is just as important as when it is disclosed.

Information that is technically available may still be ineffective if it is not sufficiently prominent or accessible.

Courts consider whether a reasonable consumer would actually notice and understand the information in the context in which it appears.

This includes factors such as placement, font size, contrast, and the structure of the communication, particularly in digital interfaces.

In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, the High Court emphasised the importance of the impression formed by an ordinary consumer rather than a careful or analytical reader.

The Court stated:

An ordinary buyer would not be expected to make a detailed comparison of one chair with another, and the general impression given by the appellant’s chairs was substantially the same as that given by the respondent’s.

This principle applies equally in pricing contexts, where consumers are unlikely to scrutinise fine print or secondary information when forming their understanding of price.

Whether the Fee is Optional or Unavoidable

Another important factor is whether the additional fee is optional or unavoidable.

Optional extras are less likely to be misleading, provided they are clearly distinguished from the base price and genuinely optional in practice.

By contrast, mandatory charges that must be paid by all consumers present a higher risk.

If a consumer cannot obtain the product or service at the advertised price without incurring the additional fee, the headline price may create a misleading impression.

This distinction was central to the findings in Australian Competition and Consumer Commission v Virgin Australia Airlines Pty Ltd (No 2) [2017] FCA 204.

The Court declared at [1]:

the lowest price (including the Booking and Service Fee) that could be payable by a customer … was $92.70 per person.

This highlights that where a fee is unavoidable, it forms part of the true price and must be disclosed in a way that allows consumers to understand that reality from the outset.

Taken together, these factors demonstrate that whether a fee is “hidden” depends on how the pricing operates in practice.

A fee may be legally problematic not because it exists, but because it is disclosed too late, presented too obscurely, or structured in a way that distorts the consumer’s understanding of the true price payable.

Can Businesses Defend Misleading Pricing Claims?

Even where pricing conduct is challenged under the Competition and Consumer Act 2010, businesses will often seek to justify their practices by pointing to disclosures, industry norms, or the technical accuracy of their pricing statements.

However, the case law demonstrates that these arguments are frequently unsuccessful where the overall impression remains misleading.

Common Arguments Businesses Raise

A recurring argument is that all relevant fees or conditions were ultimately disclosed to the consumer.

Businesses may contend that because the information was available somewhere in the transaction, there can be no misleading conduct.

However, courts consistently reject this approach where the disclosure occurs too late or is insufficiently prominent.

The focus is not on whether the information exists, but whether it is conveyed in a way that allows consumers to understand the true price at the relevant time.

Another common argument is that the pricing is technically accurate.

For example, a business may argue that a headline price is correct as a starting point, even if additional charges apply.

This argument also tends to fail where the overall impression created is that the advertised price is the total price payable.

In Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2011] FCA 1254, the Court rejected the notion that the existence of qualifying conditions necessarily avoids misleading conduct.

The Court stated at [10]:

the ACCC also alleges that … TPG did not specify in a prominent way the minimum total charge or ‘single price’ … as required by the Act.

This illustrates that compliance depends not only on disclosure, but on how clearly and prominently the total price is communicated.

Businesses may also argue that their pricing reflects standard industry practice.

While this may be commercially relevant, it is not a legal defence.

Conduct that is widespread within an industry may still contravene the Australian Consumer Law if it misleads consumers.

When Disclaimers May Assist

Disclaimers and qualifying statements can play a role in reducing the risk of misleading conduct, but their effectiveness is limited.

To be effective, a disclaimer must be clear, prominent, and presented at a time when it can influence the consumer’s understanding of the price.

A disclaimer that contradicts or significantly qualifies a headline representation must be sufficiently visible to correct the impression created by that headline.

If the qualification is buried in fine print, displayed briefly, or only accessible through additional steps, it is unlikely to be effective.

This issue was considered in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54, where the High Court examined whether less prominent qualifying information could correct a misleading headline price.

The Court stated at [2]:

much less prominently, the advertisements qualified this offer…

This reflects the broader principle that the effectiveness of a disclaimer depends on its ability to alter the overall impression conveyed to consumers.

If the dominant message remains misleading, the presence of a disclaimer will not prevent a contravention.

Taken together, these principles demonstrate that defences based on disclosure, technical accuracy, or industry practice will only succeed where the pricing, viewed as a whole, conveys a clear and accurate impression of the true cost.

Legal Consequences of Misleading Pricing

Misleading pricing practices can expose businesses to significant legal and commercial consequences, these extend beyond regulatory enforcement and may affect a business’s reputation, contractual relationships, and financial position.

Regulatory Enforcement

The primary regulator responsible for enforcing Australian Consumer Law is the Australian Competition and Consumer Commission.

Where misleading pricing is identified, the regulator may commence proceedings seeking a range of remedies depending on the nature and seriousness of the conduct.

These may include declarations that the conduct contravened the law, injunctions restraining future conduct, corrective advertising orders, and pecuniary penalties.

Pecuniary penalties may be available for specific false or misleading representations about price, including contraventions of s 29 of the Australian Consumer Law, but not for a bare contravention of s 18 alone.

In Australian Competition and Consumer Commission v Virgin Australia Airlines Pty Ltd (No 2) [2017] FCA 204, the Court imposed a financial penalty following findings of misleading pricing conduct.

The Court ordered at [2]:

pursuant to s 224 of the Australian Consumer Law, in respect of its conduct … Virgin Australia pay … a pecuniary penalty in the sum of $200,000.

This reflects the role of penalties in promoting both specific and general deterrence, particularly in industries where pricing practices have widespread consumer impact.

Regulatory action may also require businesses to implement compliance programs or undertake corrective steps to address misleading conduct.

Private Litigation Exposure

In addition to regulatory enforcement, misleading pricing may give rise to claims by private parties.

Consumers and, in some cases, competitors who suffer loss or damage because of misleading conduct may seek compensation or other orders under the Australian Consumer Law.

Competitors may also bring actions where misleading pricing confers an unfair commercial advantage.

These claims may involve damages, injunctions, or other remedies depending on the circumstances of the case.

The availability of multiple avenues for enforcement means that pricing conduct can be challenged from several directions simultaneously.

This increases the overall exposure faced by businesses engaging in misleading practices.

Broader Commercial Consequences

Beyond formal legal remedies, misleading pricing can have broader commercial implications.

Regulatory investigations and court proceedings may attract public scrutiny, particularly where they involve consumer-facing industries.

This can result in reputational damage, loss of consumer trust, and adverse impacts on brand value.

The deterrent effect of enforcement action is also reflected in the courts’ approach to penalties.

In Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54, the High Court considered the role of penalties in addressing contraventions of consumer protection legislation.

The Court stated at [8]:

that the penalty reflect the importance of personal and general deterrence considerations.

This emphasises that the consequences of misleading pricing extend beyond the individual contravention and are intended to influence broader market behaviour.

Taken together, these consequences highlight the importance of ensuring that pricing representations accurately reflect the true cost of goods or services.

Emerging Risks in Misleading Pricing Compliance

While the core principles governing misleading pricing are well established, their application continues to evolve as commercial practices and technologies change.

Businesses operating in dynamic or highly competitive markets should be particularly aware that conduct which may have previously gone unchallenged can become the subject of regulatory scrutiny as expectations shift.

Emerging Issues in Pricing Conduct

One area of ongoing development is comparative pricing, particularly “was/now” or discount-based representations.

In environments where prices fluctuate frequently, questions arise as to what constitutes a genuine reference price and how long a product must be offered at that price before a discount claim can be made.

These issues are currently being tested in litigation and regulatory enforcement, and the boundaries of acceptable conduct in this area remain fact-specific.

Another area of uncertainty relates to digital pricing practices, including personalised pricing and algorithm-driven pricing models.

These systems may adjust prices based on consumer behaviour, demand, or other variables, raising questions about transparency and whether consumers are being misled about the true nature of pricing.

The application of traditional misleading conduct principles to these technologies is still developing and may be shaped by future judicial consideration.

Jurisdictional and Factual Sensitivity

Although the Competition and Consumer Act 2010 operates as a uniform national law, the application of its provisions is highly dependent on the specific facts of each case.

Small differences in how pricing is presented, the nature of the audience, or the commercial context can significantly affect whether conduct is considered misleading.

This means that outcomes are not always predictable, particularly in novel or borderline scenarios.

Courts continue to emphasise that each case must be assessed on its own facts, applying established principles to the particular circumstances of the conduct in question.

Key Takeaways on Misleading Pricing in Australia

Misleading pricing under Australian Consumer Law is not limited to situations where a price is simply incorrect.

Rather, it extends to any conduct that creates a misleading impression about the true cost of goods or services.

Across the case law, a consistent theme emerges. Courts are concerned with the overall impression conveyed to consumers, including the prominence of headline prices, the timing and clarity of disclosures, and the practical realities of how consumers engage with pricing information.

Practices such as hidden fees, drip pricing, and misleading discount claims illustrate how technically accurate information can still give rise to liability if it is presented in a way that distorts consumer understanding.

The consequences of non-compliance are significant, ranging from regulatory enforcement and financial penalties to private litigation and reputational harm.

At the same time, evolving commercial practices, particularly in digital environments, continue to test the application of established principles, reinforcing the importance of careful and transparent pricing strategies.

Ultimately, compliance requires more than simply including all relevant information.
It requires ensuring that the information is presented in a way that allows consumers to understand, at the outset, the true price they will be required to pay.

Frequently Asked Questions

What is misleading pricing under Australian Consumer Law?

Misleading pricing occurs when a business presents a price in a way that creates a false or misleading impression about the true cost. This includes hidden fees, drip pricing, or unclear discounts, even if the price is technically correct.

Are hidden fees illegal in Australia?

Hidden fees are not automatically illegal. They become unlawful when they are not clearly disclosed upfront and create a misleading impression about the total price payable under the Australian Consumer Law.

What is drip pricing and is it legal?

Drip pricing is where additional mandatory fees are revealed progressively during a transaction. It may breach the Competition and Consumer Act 2010 if it misleads consumers about the true price.

Can a business advertise a price that excludes fees?

In many cases, yes. If a business advertises only part of a price and the total minimum price can be calculated, the Australian Consumer Law requires the business to display the single price prominently. This usually includes taxes, duties, unavoidable fees and pre-selected charges, but not genuinely optional extras that are not pre-selected.

Do businesses have to show a single total price upfront?

In many cases, yes. Where a single price can be calculated, businesses must ensure consumers understand the total minimum cost, particularly where additional charges are unavoidable.

Are “was/now” or discount prices regulated in Australia?

Yes, discount pricing must be genuine. Using inflated reference prices or misleading sale claims may breach the Australian Consumer Law.

Do disclaimers protect against misleading pricing claims?

Not always, disclaimers must be clear, prominent, and timely. Fine print will not fix a misleading headline price if the overall impression remains misleading.

Can consumers sue for misleading pricing?

Yes, consumers can seek compensation if they suffer loss due to misleading pricing under Australian Consumer Law.

What penalties apply for misleading pricing in Australia?

Businesses may face ACCC enforcement action, declarations, injunctions, corrective advertising orders, compliance orders, compensation orders and, where a penalty provision such as s 29 is contravened, pecuniary penalties. A contravention of s 18 alone does not itself attract a pecuniary penalty.

What industries are most at risk for misleading pricing claims?

High-risk industries include airlines, travel, accommodation, ticketing, eCommerce, subscription services, real estate, telecommunications and other sectors where headline prices, discounts, surcharges, pre-selected extras or staged online checkout processes are commonly used.