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Jetstar and Virgin to pay penalties for misleading drip pricing practices

Staff Writer |
The Federal Court in Australia has ordered Jetstar Airways to pay a $545,000 penalty and Virgin Australia Airlines to pay a $200,000 penalty for breaches of the Australian Consumer Law.

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Drip pricing is where a headline price is advertised at the beginning of an online purchasing process and additional fees and charges (which may be unavoidable for consumers) are then incrementally disclosed (or dripped).

This can result in consumers paying a higher price than the advertised price or spending more than they realise.

In November 2015, Jetstar was found to have made false or misleading representations about specific advertised airfares on its website in 2013 and its mobile site in 2014.

Virgin was found to have made false or misleading representations about specific advertised airfares on its mobile site in 2014.

In imposing the penalty against Jetstar, Justice Foster commented upon the importance of the concept of general deterrence in the imposition of penalties, and noted that the penalty imposed is designed to discourage similar behaviour by others.

The penalty imposed on Virgin was ordered following joint submissions to the Court by Virgin and the ACCC.


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