Cleared for Penalties: Webjet’s Misleading Consumer Practices Don’t Fly with the Federal Court

Introduction

On 28 July 2025 the Federal Court issued its decision ordering prominent online travel agency Webjet Marketing Pty Ltd (a wholly owned subsidiary of Webjet Group Limited) (Webjet) to pay $9 million in penalties for making false or misleading statements about airfare prices and booking confirmations.

The case, initiated by the Australian Competition and Consumer Commission (ACCC), underscores the critical importance for businesses in ensuring transparency in advertising and pricing practices to avoid falling foul of the Australian Consumer Law (ACL). The ruling reflects the regulator’s strategic focus on addressing misleading surcharging practices and other add-on costs.

Runway to Proceedings

The proceedings against Webjet were instituted by the ACCC on 28 November 2024 following complaints from consumers regarding misleading pricing practices. The ACCC's investigation was prompted by a consumer complaint about an airfare advertised as “from $18” which ultimately cost nearly three times that amount due to undisclosed fees.

The ACCC brought its case under the provisions of the ACL which prohibit misleading or deceptive conduct (section 18 of the ACL), and the making of false or misleading representations with respect to the price of goods (section 29(1)(i) of the ACL). Under the ACL, businesses must ensure that their advertising accurately reflects the total price consumers will pay, including any compulsory fees or surcharges.

Findings of the Court

Price Representations and Misleading Advertising

The Court found that between November 2018 and November 2023, Webjet engaged in systematic misleading pricing practices across multiple platforms. The company promoted flights as being available "from $XX" on its website, mobile app, promotional emails, and social media advertisements on Facebook and Instagram. However, these promoted prices excluded compulsory fees that Webjet charged on every booking, regardless of consumer choices during the booking process. These mandatory charges, termed "Servicing Fee" and "Booking Price Guarantee" fee, ranged from $34.90 for domestic flights to $54.90 for international bookings, representing a significant additional cost that consumers were unaware of when initially attracted by the advertised prices.

The Court found that Webjet's pricing representations were fundamentally misleading because they created the false impression that consumers could purchase flights at the promoted price, when in reality this was impossible due to the mandatory additional fees. Whilst some advertised prices included asterisks, the information about these compulsory charges was not displayed in a sufficiently clear, prominent, or proximate manner to neutralise the false, misleading or deceptive effect of the price representations. Additionally, social media advertisements contained no information about the additional fees whatsoever, leaving consumers uninformed about the true cost of their intended purchase.

Confirmed Booking Representations

Beyond the pricing misrepresentations, the Court found that Webjet also engaged in misleading conduct regarding booking confirmations between 2019 and 2024. After consumers completed the booking process and made payment through Webjet's platform, the company would display confirmation pages and send confirmation emails suggesting that tickets had been successfully acquired at the price paid. However, in 382 instances, these confirmations were false and misleading because consumers had not actually secured their tickets at the stated price. Webjet subsequently demanded additional payments from these consumers to complete their bookings, with the extra charges averaging approximately $770 and reaching as high as $21,764 in one case. This practice left consumers in the precarious position of either paying substantial additional fees or potentially losing their travel arrangements.

Harm to Consumers and Commercial Advantage

The Federal Court found that both in making the price representation and the confirmed booking representations above, Webjet had:

1. engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of s 18(1) of the ACL; and
2. made false or misleading representations with respect to the price of the booking/services in contravention of s 29(1)(i) of the ACL.

Webjet's misleading conduct had significant detrimental effects on consumers whilst providing the company with unfair commercial advantages. The artificially low promoted prices enticed consumers to engage with Webjet's platform, depriving them of the opportunity to make informed purchasing decisions based on accurate pricing information. This conduct enabled Webjet to attract customers through unattainable flight prices and subsequently extract additional revenue through compulsory fees, whilst gaining a competitive advantage by making its airfares appear more attractive than they actually were.

The misleading booking confirmations instilled false confidence in consumers, leading them to make additional travel arrangements and commitments that became difficult to cancel when Webjet later demanded extra payments. By taking payment immediately without securing tickets at the advertised price, Webjet deprived consumers of funds they could have used elsewhere and denied them opportunities to secure alternative flights that may have been cheaper or more suitable, whilst simultaneously gaining an unfair advantage over competitors who were denied potential customers due to Webjet's deceptive practices.

Key Takeaways

• Transparency in Price Advertising: Businesses must ensure that all advertised prices are inclusive of compulsory fees and surcharges. Promoting headline prices that exclude mandatory fees (like Webjet's $34.90-$54.90 service charges) may constitute misleading conduct under the ACL, regardless of whether these fees are disclosed elsewhere in fine print.
• Social Media Advertising: Businesses should be careful to ensure that advertisements on social media platforms contain sufficient pricing information so as not to be misleading, and should not rely on website terms and conditions or fine print to disclose additional charges. The absence of fee disclosure in Webjet's Facebook and Instagram advertisements was a significant factor in the Court's decision, demonstrating that the limited character space of social media is not an excuse for incomplete pricing disclosure.
• Compliance Programs and Staff Training: Implementing robust compliance programs and training staff on consumer law obligations are essential steps in preventing misleading advertising practices. Businesses should regularly review their advertising strategies and ensure that all promotional materials are scrutinised for compliance with the ACL.