The ACCC has filed a complaint against online travel booking website Webjet Marketing Pty Ltd in the Federal Court. It is alleged that the company misrepresented flight pricing and bookings to consumers.
Webjet’s app and website offer travel-related products and services to consumers, including from different airlines. Consumers can compare and book flights, hotels, car rental and travel insurance through the Webjet website and app.
Webjet is accused of breaching the Australian Consumer Law when it made statements about minimum airfare prices in its app, in marketing emails, on social media, and on its website without mentioning compulsory fees.
The statements included “flights from $x” when the price quoted excluded Webjet’s compulsory ‘Webjet servicing fee’ and ‘booking price guarantee’ fee. This ranged from $34.90 to $54.90 per booking, depending on whether the flights were domestic, NZ/Pacific flights or other international flights. These statements were made for various periods of up to five years between November 2018 and November 2023.
The ACCC said Webjet Fees were not disclosed in social media posts. Although the Webjet Website, Webjet App and most promotional emails contained information about the Webjet Fees, it was typically only accessible by scrolling towards the bottom of the relevant screen, was in fine print and not sufficiently clear or prominent.
“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. 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,” ACCC Chair Gina Cass-Gottlieb said.
Webjet is also alleged to have breached consumer law by displaying a confirmation page online and sending a confirmation email. This is after paying for a completed flight booking. In the case of 382 bookings, it had not booked the flight with the airline, the ACCC said.
In these cases, ACCC alleges Webjet later sought additional payment from the consumer to complete the booking. It also offered the consumer a refund for the flight, despite earlier confirmation.
Some consumers may have made and paid for other travel arrangements on the basis of the confirmation. They may have had to choose between paying more money or cancelling other arrangements at a potential loss, the ACCC said.
It is alleged that Webjet made these misleading representations for 382 bookings over more than 5 years. This was between 1 November 2018 and 25 June 2024.
“We are very concerned about this alleged conduct by Webjet, which represented to consumers that their flight booking had been confirmed and left some consumers in the position of having to pay more to later complete the booking,” Cass-Gottlieb said.
“The ACCC is currently prioritising consumer and competition issues in the aviation sector as well as conduct in the digital economy. We remind all businesses, whether they are online retailers or bricks and mortar stores, that they need to comply with the Australian Consumer Law by not misleading consumers and displaying prices clearly, including hidden fees and surcharges.”
The ACCC was seeking pecuniary penalties, declarations, injunctions, consumer redress, costs and other orders.
In 2024, Webjet Group Limited (comprising the B2C businesses of Webjet OTA, GoSee and Trip Ninja) demerged from Webjet Limited creating two independent and simplified companies, improving their abilities to pursue independent strategic priorities and growth agendas relevant to each business. As part of the demerger, Webjet Limited changed its name to Web Travel Group Limited.
Webjet Group Limited acknowledged the proceedings against Webjet Marketing Pty Ltd (Webjet Marketing), a wholly owned subsidiary of Webjet Group.
According to a statement issued to investors: "Webjet Marketing has fully cooperated with the ACCC prior to the issuance of these proceedings and has already voluntarily and proactively undertaken a number of steps to further improve its disclosure of pricing and fees.
"So far as Webjet Marketing is aware, the ACCC concerns do not relate to its current fee disclosure and pricing practices.
"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.
"Webjet Marketing has always sought to provide great value and service to its customers, helping people compare flight prices and travel products transparently at a time where domestic flight prices are soaring due to a lack of competition.
"Millions of customers have chosen to book through Webjet Marketing during the period in question and we have very rarely been contacted by customers complaining about our disclosure of fees. Webjet Group is confident there is no widespread customer dissatisfaction with our offering, disclosure, service or pricing.
"The ACCC is seeking a range of remedies including pecuniary penalties and it is not yet possible to determine the financial implications of any outcome from the proceedings.
"As the matter is subject of proceedings in the Federal Court, Webjet Group will not be making any further comment at this time."
As at 1:12 pm (AEDT) Web Travel Group Limited (ASX: WEB) had a stock price of $4.84. It has a market cap of $1.88 billion. Webjet Group Limited (ASX: WJL) had a stock price of $0.81. Its market cap is $331.68 million.