In the case of Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 (ACCC v TPG), the High Court of Australia (High Court) drew a distinction between mere puffery and representations with the intention of marketing.  This article explores the decision in ACCC v TPG and the distinction between puffery and misleading and deceptive conduct.

What is puffery?

From a legal perspective, specifically contract law, puffery refers to ‘exaggerated praise’ or one-off hyperbole where the statements do not amount to any objective promise or offer.  Often, puffery will present itself in the form of some exaggerated claim about a good or service, usually for marketing purposes.  Examples of puffery include:

• exaggeration of the effects or capabilities of goods or services;
• hyperbolic slogans or claims; and
• vague product descriptions.

Background to ACCC v TPG

The case of ACCC v TPG focused on whether an ordinary and reasonable customer would have assumed that an advertised internet service was bundled with a telephone service.  The advertisement that was allegedly misleading consisted of a prominent headline advertising a TPG service at a desirable price, with the terms qualifying that offer being less prominent.[1]  Further, the High Court contemplated whether the claims advertised constituted mere puffery or misleading and deceptive conduct.

The advertisements deployed in TPG’s campaign prominently displayed the offer to supply broadband internet ADSL2+ service for $29.99 per month. Much less prominently, the advertisements qualified this offer by stating that it was made on the basis that the ADSL2+ service was available only when bundled with a home telephone service, provided by TPG through landline technology, for an additional $30.00 per month (with a minimum commitment of six months). In addition to this, TPG required the consumer to pay a setup fee of $129.95 plus a deposit of $20.00 for telephone charges.

In this case, the High Court relied upon section 52 of the Trade Practices Act 1974 (Cth) (TPA), which prohibits corporations from engaging in conduct that is misleading or deceptive.  The High Court also relied upon section 53 of the TPA which prescribes that a corporation must not, in the supply or possible supply of goods or services make a false or misleading representation that:

• goods are of a particular standard, quality, value, grade, composition, style or model
• services are of a particular standard, quality, value or grade; or
• goods are new; or
• a particular person has agreed to acquire goods or services; or
• purports to be a testimonial by any person relating to goods or services; or
• goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or
• the person making the representation has a sponsorship, approval or affiliation; or
• concerns the price of goods or services; or
• concerns the availability of facilities for the repair of goods or of spare parts for goods; or
• concerns the place of origin of goods; or
• concerns the need for any goods or services; or
• concerns the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

Where is the line between puffery and misleading and deceptive conduct?

On appeal, the High Court confirmed that the primary Judge’s determination was correct, particularly in holding that the ‘dominant message’ of an advertisement remains of crucial importance.[2]  The case of Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 (Puxu) was relied upon in distinguishing misleading and deceptive conduct from any other representation.

The case of Puxu rested predominantly on that ‘virtually identical’ goods were sold, with a similar appearance between the appellant and respondent’s goods.[3]  The case found that reasonable persons would pay attention to the label or brand of the good they were purchasing and therefore would not be misled.[4]  ACCC v TPG was contrasted with Puxu given the advertisements were an “unbidden intrusion on the consciousness of the target audience“.[5]  The function of the advertisements was determined to be capturing the attention of individuals.[6]  However, there was no guarantee that these individuals would pay attention to the advertisement and its nuances.[7]  This is not a failure of a customer to take reasonable care for their own interests, but rather misleading and deceptive conduct on TPG’s part.[8]

Further, ACCC v TPG considered the case of Campbell v Backoffice Investments Pty Ltd [2009] HCA 25, which established that misleading conduct requires consideration as to whether the conduct within its greater context would “lead a person into error“.[9]  The carelessness of consumers was deemed relevant to this analysis.[10]  Misleading advertisements whereby individuals are enticed into a “marketing web”, despite whether consumers come to an understanding before concluding a transaction, are considered misleading and deceptive conduct under section 52 of the TPA.[11]

In ACCC v TPG the advertisement was more than mere puffery or a misrepresentation; instead, it constituted misleading and deceptive conduct.[12]  The appeal was dismissed.[13]

Links and further references

Legislation

Trade Practices Act 1974 (Cth)

Cases

Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54

Campbell v Backoffice Investments Pty Ltd [2009] HCA 25

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44

Further information

If you need advice on misleading and deceptive conduct, contact us for a confidential and obligation‑free discussion.

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances

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[1] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [3].

[2] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [45].

[3] Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 at [5].

[4] Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 at [5].

[5] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [47].

[6] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [47].

[7] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [47].

[8] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [47].

[9] Campbell v Backoffice Investments Pty Ltd [2009] HCA 25 at [25].

[10] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [49].

[11] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [50].

[12] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [58].

[13] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [85].

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