Australia: Competition Review: December 2015

Last Updated: 8 December 2015
Article by Eddie Scuderi and Mark McCowan


Court finds that Jetstar and Virgin Australia engaged in misleading 'drip pricing' practices

On 17 November 2015, the Federal Court of Australia found that Jetstar Airways Pty Ltd (Jetstar) and Virgin Australia Airlines Pty Ltd (Virgin) contravened the Australian Consumer Law (ACL) by engaging in misleading or deceptive conduct and making false or misleading representations about the price of particular advertised airfares.

In relation to Jetstar, the Court found that representations about specific advertised airfares made on its website in 2013, and its mobile site in 2014, were false or misleading. However, the Court held that the ACCC had not established that the alleged misleading representations were made by Jetstar on its 2014 website, nor in its promotional emails in 2014.

In relation to Virgin, the Court found that the representations made on its mobile site in 2014 about specific advertised airfares were false or misleading. The Court held that the ACCC had not established that the alleged misleading representations were made by Virgin on its website, nor in its promotional emails of 2014.

The relevant conduct in both of these proceedings is an example of 'drip pricing'. 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 or applied in most transactions) are then incrementally disclosed. This can result in consumers paying a higher price than the advertised price and spending more than they realise.

The ACCC alleged in these proceedings that, in relation to specific advertised airfares, Jetstar and Virgin failed to adequately disclose an additional Booking and Service Fee ($8.50 and $7.70 respectively) which was charged on bookings paid using most credit cards or PayPal (and additionally in the case of Virgin, by debit card).

Drip pricing conduct was a priority enforcement area in the ACCC's 2014 Compliance and Enforcement Policy with the ACCC addressing identified behaviour across a number of industries. It remains a focus for the ACCC, as part of the ACCC's current priority area of systemic consumer issues in the online marketplace.

A hearing on relief will be held on a date to be fixed by the Court.

Federal Court finds Chrisco's lay-by agreements contained unfair contract term

On 11 November 2015, the Federal Court has found that Chrisco Hampers Australia Ltd (Chrisco) breached the ACL in relation to its sale of hampers to consumers by lay-by agreement, in proceedings brought by the ACCC.

The Court found that Chrisco included an unfair contract term in its 2014 lay-by agreements relating to its "HeadStart Plan", which allowed Chrisco to continue to take payments by direct debit after the consumer had fully paid for their lay-by order. Consumers were required to 'opt out' in order to avoid having further payments automatically deducted by Chrisco after their lay-by had been paid for.

In concluding that the HeadStart term was unfair, Justice Edelman considered the contract as a whole, including the transparency of the term, and concluded that the term caused a significant imbalance in the rights and obligations between Chrisco and its customers.

The matter is now to be set down for a penalty hearing on date to be fixed.


Iron Mountain Incorporated – proposed acquisition of Recall Holdings Limited

On 5 November 2015, the ACCC released a Statement of Issues (SOI) (see here) on the proposed acquisition of Recall Holdings Limited (Recall) by Iron Mountain Incorporated (Iron Mountain).

Iron Mountain proposes to acquire Recall by a scheme of arrangement. Under the proposed transaction, Iron Mountain will acquire all of Recall's operations, including in Australia, North America, South America, Europe and the Asia-Pacific.

Iron Mountain is a global supplier of information management services based in the United States, with operations in every state and territory in Australia. Recall is an Australian public company that is also a global supplier in the information management industry. Recall has operations in every Australian state and territory, with the exception of the Northern Territory.

The ACCC is concerned that the proposed acquisition would:

  1. likely lead to a substantial lessening of competition in a national market for the supply of physical document management services; and
  2. may lead to a substantial lessening of competition in regional markets, centred on each state and territory capital city (excluding the Northern Territory).

For the national market, the ACCC is specifically concerned that the proposed acquisition would lessen constraints faced by Iron Mountain and would be likely to lead to an increase in prices and/or a reduction in service. Recall and Iron Mountain are the two largest providers of physical document management services in Australia. The combined national market share of the merger parties would be between 59 and 71 per cent, and regional markets would be similarly concentrated.

For the regional market, the ACCC is specifically concerned about the merged parties enjoying high market shares in each regional market, limited competitive constraints and barriers to entry.

Iron Mountain and Recall compete closely for both national customers who require document storage in multiple locations, and local customers who require storage in just one region. Few other suppliers can supply customers in multiple regions. The individual regional markets are also concentrated, despite the presence of several smaller suppliers in each.

Submissions in relation to the SOI closed on 19 November 2015 with the ACCC aiming to announce its final decision on 15 December 2015.


ACCC extends decision date after ihail revises taxi booking app

On 10 November 2015, the ACCC extended the timeframe for making a final decision on ihail's application for authorisation.

On 12 October 2015, the ACCC released a draft determination proposing to deny authorisation to a joint venture between a number of Australian regional taxi cab companies and other operators to launch the ihail smartphone application (ihail) within the Australian market.

In the draft decision the ACCC raised concerns that the joint venture could reduce competition between taxi networks and reduce the viability of existing taxi booking apps. Importantly, passengers would only be able to pay for fares booked with ihail through the app, and these payments would be exclusively processed by Cabcharge. The ACCC was concerned this would shut out opportunities for Cabcharge's competitors to provide non-cash payment processing services to ihail customers, and therefore this would significantly reduce competition between taxi payment processing providers.

ihail has since made a revised submission proposing changes to how its smartphone taxi booking app will operate and its proposed business model.

Changes include:

  • amending the exclusive Cabcharge booking feature to allow for in car payment. This change will allow consumers to choose to pay in-car, using cash or any chosen credit or debit card;
  • disabling the tipping and priority dispatch payments for taxi services; and
  • amending the app to allow customers to choose which taxi network they wish to book on, thereby giving taxi's an incentive to compete on price, dispatch times and via customer ratings.

A final decision is now expected in February/March 2016.

Sea Swift withdraws application for merger authorisation

Sea Swift Pty Ltd (Sea Swift) has withdrawn its application to the Australian Competition Tribunal for authorisation to acquire the Northern Australia based marine freight business of Toll Marine Logistics Australia, which is a division of Toll Holdings Limited.

On 9 July 2015, the ACCC announced its decision to oppose Sea Swift's proposed acquisition because it was likely to have the effect of substantially lessening competition.


Federal government releases response to the Harper Competition Policy Review

On 24 November 2015, the Federal Government released its response to the Competition Policy Review chaired by Professor Ian Harper (Harper Review). The government states that it supports 44 of the Harper Review recommendations in full or in part and "remains open to" the remaining 12 recommendations subject to further review and consultation. Once implemented, there will be significant changes to the Competition and Consumer Act 2010 (Cth), ACCC processes (e.g. merger clearance) and significant changes to a number of industries. For more information, see the Corrs in Brief article here.

Unfair Contract Terms Regime for Small Businesses

On 12 November 2015, the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015 (Cth) was given Royal Assent. This legislation extends the application of the unfair contract term provisions in the Australian Securities and Investment Commissions Act 2001 (Cth) and the ACL to apply to small business contracts and supplements the existing law on unfair contract terms for consumers.

The protections will come into effect on 12 November 2016. Businesses have a one year grace period to review and amend their standard form contracts in order to comply with the new regime. On 17 November 2015, the ACCC's media release reminded businesses to closely review the standard form contracts they use when dealing with other businesses and released two videos to help small businesses understand their rights and obligations under the new law.

For more information, see the Corrs in Brief article here.

Australia and China to cooperate on cartel investigations

On 5 November 2015, it was announced that the ACCC and the National Development and Reform Commission of the People's Republic of China (NDRC) signed a memorandum of understanding, which is envisaged to increase engagement between the ACCC and NDRC on international cartel investigations affecting Australian and Chinese markets. Where the ACCC and NDRC take action in relation to the same or related anti-competitive conduct, the parties may exchange information and evidence regarding the action.

The NDRC's Bureau of Price Supervision and Antimonopoly is one of three bodies administering China's Anti-Monopoly Law. It is the agency responsible for price supervision and related enforcement action. The ACCC now has cooperation agreements in place with all three of China's competition agencies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions