The Australian Competition and Consumer Commission (ACCC) is taking online travel giant Webjet to the Federal Court.
The consumer watchdog alleges that for up to five years, ending in November 2023, Webjet promoted "cheap flights" without adequately disclosing additional fees consumers would incur, allegedly in breach of Australian Consumer Law.
The ACCC's case centres on Webjet's marketing strategies across various platforms, including its website, mobile app, social media channels, and promotional emails.
The ACCC alleges Webjet frequently advertised flights with statements like "flights from $X," which enticed consumers with what appeared to be low fares.
However, the watchdog said those prices excluded compulsory fees such as a service fee and the booking price guarantee fee, which ranged from $34.90 to $54.90 a booking depending on the flight's destination.
ACCC chair Gina Cass-Gottlieb said transparent pricing was especially important during times of economic pressure when consumers were more vigilant about spending.
"We know how much Australian consumers value air travel to stay connected for work, leisure or to visit family. During this time of cost pressures, many consumers are carefully considering travel arrangements and seeking to save money," Ms Cass-Gottlieb said.
"A statement about the lowest price must be a true minimum price, not a price subject to further fees and charges before a booking can be made."
The ACCC said the fees were not disclosed in Webjet's social media posts. The Webjet website and app and most promotional emails did inform customers about fees, it was "typically only accessible by scrolling towards the bottom of the screen, was in fine print and not sufficiently clear".
Unfulfilled flight bookings and additional charges
Beyond misleading advertising, the ACCC is also accusing Webjet of failing to honour flight bookings.
In at least 382 instances, it said Webjet displayed confirmation pages and sent confirmation emails to customers after taking payments, but later told them the flight had not been booked.
In these cases, the ACCC alleges that Webjet either demanded additional payments to complete the booking or offered refunds, despite it initially confirming the booking.
This alleged deceptive practice not only undermined consumer trust, Ms Cass-Gottlieb said, but disrupted travel plans, and caused significant inconvenience and financial strain for affected passengers.
The case will be heard in Federal Court later on Thursday.
Webjet's failure to prominently disclose additional fees meant that consumers were misled about the true cost of their travel arrangements.
The fine print and the requirement to scroll to the bottom of screens to find fee information were deemed insufficient and not conspicuous enough to inform customers adequately.
The allegations have been brought against Webjet Group Limited subsidiary, Webjet Marketing Pty Ltd.
In an announcement to the ASX, the group said it was cooperating with the ACCC and had taken steps to enhance fee transparency.
"Webjet Marketing takes compliance with Australian Consumer Law extremely seriously and has always prided itself on its high levels of trust with all stakeholders, especially our customers," the statement said.
It also said it had received very few complaints about fee disclosures.
The ACCC is pursuing financial penalties, it said, but the impact on Webjet remained unclear.