The Federal Court has ordered that STA Travel Pty Ltd (STA Travel) pay $14 million in penalties for making false or misleading claims when advertising its MultiFLEX Pass product.

STA Travel admitted that, between March 2014 and August 2019, it made misleading representations in MultiFLEX Pass advertising that consumers who bought the airfare add-on could change their flights without paying fees or charges.

“Consumers were misled into purchasing the MultiFLEX Pass on the representation that they would not have to pay anything further for date changes to their flights, when, in fact, STA often charged consumers hundreds of dollars for changing their flights” ACCC Commissioner Sarah Court said.

In many cases, STA Travel’s charges were not reflective of additional fees imposed by the airline. For example, in almost a quarter of cases where a customer was charged extra by STA Travel, the amount was more than double the additional airfare and tax imposed by the airline.

“In 12 per cent of cases, STA Travel charged MultiFLEX Pass customers to make a change to a flight although the airline itself had not charged STA Travel anything at all for the change,” Ms Court said.

“These penalties serve as a timely reminder to all travel businesses that they must not misrepresent the costs applicable when travel services are changed.”

The MultiFLEX Pass cost up to $149 to purchase upfront. Between 2015 and 2019, STA Travel estimates it sold on average approximately 16,000 MultiFLEX Passes per year.

STA Travel admitted liability and made joint submissions with the ACCC to the Federal Court. STA Travel will also contribute to the ACCC’s legal costs.

Notes to Editors

The ACCC initiated proceedings against STA Travel in March 2019 and the proceedings are unrelated to any COVID-19 issues.

Due to the COVID-19 pandemic, the ACCC is assessing the impacts on consumers and working with the travel industry more broadly. Given the circumstances, the ACCC is urging all businesses to treat customers fairly in these exceptional times.

More information on consumer rights during the COVID-19 pandemic can be found here: COVID-19 (coronavirus) information for consumers.

Background:

STA Travel is a national supplier of travel and tourism services. Its advertising targets students and young people and emphasises discounts and flexibility.

STA Travel promoted the MultiFLEX Pass via multiple channels including its website, brochures/flyers, in store posters, a YouTube video and in-store LCD screen displays.

STA Travel sold a range of MultiFLEX Passes to consumers, namely:

• the ONEFlex Pass, costing $49 and allowing one flight date change;
• the ‘3 Change Pass’ or ‘Multiflex Pass’, costing $99 and allowing three flight date changes; and
• the ‘Unlimited’ or ‘Ultimate’ change pass, costing $149 and allowing unlimited flight date changes.

An example of one of STA Travel’s misleading advertisements is below:

Members of the Minerals Council of Australia (MCA) and other mining associations will be able to work together to manage critical services and supplies during the COVID 19 pandemic, after the ACCC granted interim authorisation for the arrangements today.

The COVID-19 pandemic has led to shortages and supply chain disruptions for some critical services and supplies used by the mining sector.

The interim authorisation will help ensure Australia’s mining industry continues to operate safely and efficiently, by allowing members that have been notified to the ACCC to co-ordinate on the sourcing, purchase and distribution of crucial supplies and services such as health and safety equipment, logistics, equipment maintenance and consumables like fuel and explosives.

“The COVID-19 pandemic has had a dramatic impact on global manufacturing and supply chains, which has created challenges for those sectors, such as mining, that are still operating and still in need of crucial equipment and services,” ACCC Chair Rod Sims said.

“To help address these challenges, we have authorised mining companies to co-ordinate on a limited range of activities to help ensure they can continue to operate safely and efficiently.”

The authorisation only applies to activities relating to these critical services and supplies. It will, for example, allow companies to share inventories and manage demand for these critical services and supplies, coordinate deliveries, and share details of potential suppliers of personal protective equipment (PPE), such as N95 masks needed to work in underground mines.

“Importantly, the approval does not allow mining companies to coordinate on the terms, conditions or prices in supply contracts,” Mr Sims said.

“We are going to closely monitor the effect of these arrangements and when it is appropriate for this authorisation to be revoked.”

The authorisation applies to members of the MCA and seven other mining associations. The ACCC must be notified in advance of any arrangements made under the authorisation.

The ACCC will now seek feedback on interim authorisation, as well as the application for final authorisation, which is sought for a period of 12 months from the date of authorisation. More information, including the ACCC’s statement of reasons, a list of associations included, and the supplies and services covered by the authorisation, is available at Minerals Council of Australia.

Background

The Minerals Council of Australia’s membership includes many of Australia’s biggest mining companies. It has 51 full member companies and 29 associate member companies including mining service providers, state chambers, energy and transport companies and consultancy firms.

Notes to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

Broadly, the ACCC may grant a final authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.

The ACCC has granted conditional interim authorisation to allow the Australian Energy Council and wholesale and retail energy businesses to co-operate to provide financial relief to residential and business customers who may be financially impacted by the COVID-19 pandemic.

This interim authorisation allows business in the electricity and gas markets to hold discussions, share information, and enter into arrangements for the purpose of providing financial relief and other measures to small, medium and large businesses, and to expand support under existing hardship programs for residential customers.

“We know the COVID-19 pandemic is having a significant economic impact on consumers and businesses in Australia, which is why we have granted this interim authorisation,” ACCC Chair Rod Sims said.  

“Energy is an essential service and this is an important opportunity to allow energy market participants to support consumers and businesses through the pandemic.”

Importantly, authorisation is only granted on the condition that any agreements between energy retailers are not materially inconsistent with the relevant applicable principles in the Australian Energy Regulator (AER) Statement of Expectations of energy businesses: Protecting consumers and the market during COVID-19.

The Statement of Expectations sets out ten principles the AER expects businesses to adhere to during the COVID-19 pandemic to ensure the continued safe and reliable supply of energy to homes and businesses. This includes expectations about payment plans and hardship arrangements, no disconnections and deferring referrals to debt collection agencies for recovery actions.

“The AER’s Statement of Expectations provides important principles that should be adopted by energy retailers in their dealings with customers during the COVID19 pandemic, and we expect  any conduct under this authorisation to meet or exceed the expectations set out in these principles” Mr Sims said.

The AEC must also regularly update the ACCC and the AER about the information shared and the decisions made by retailers as part of the authorisation.

The ACCC and AER will also be invited to attend any meeting where the energy retailers discuss or agree on financial relief arrangements. This will provide important transparency and oversight of these discussions.

“We believe that allowing the AEC and energy businesses to work together will enable customer relief to be provided more quickly and efficiently than it would if the parties were to work on these measures independently,” Mr Sims said. 

“We will closely monitor the effect of these arrangements and when it is appropriate for this authorisation to be revoked.”

Having granted interim authorisation for the arrangements, the ACCC will now seek feedback on the application for final authorisation which is sought for a period of 12 months from the date of authorisation.

More information, including the ACCC’s interim authorisation decision, is available on the ACCC public register.

Background

The Australian Energy Council is an industry organisation representing 23 major electricity and downstream natural gas businesses operating in the wholesale and retail energy markets.

Notes to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback following interim authorisation.

Broadly, the ACCC may grant a final authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.

The ACCC has revoked an interim authorisation due to the change in market conditions caused by the COVID-19 pandemic. The ACCC granted the interim authorisation in February to five major car rental companies to jointly negotiate with Cairns Airport including discussions about their lease agreement for space, such as parking bays and counter space at the airport.

The rental companies, Avis, Budget, Hertz, Europcar, and Thrifty, had lodged their application for authorisation in late 2019, but since then, the COVID-19 pandemic has severely impacted the economy’s travel and car rental sectors.

The ACCC decided to revoke the interim authorisation after a request by the car rental companies that the ACCC delay its decision about the substantive application. This request has been granted.

The companies also indicated they would voluntary suspend collective negotiations, permitted under the interim authorisation, during the delay in considering the application.

“As the companies are not proposing to engage in the authorised conduct in the current circumstances, the interim authorisation is clearly no longer needed and it is appropriate we revoke it,” ACCC Commissioner Stephen Ridgeway said.

“Any authorisation, including interim authorisations, should only be in place for as long as they are needed.”

“The car rental companies have indicated they have no current need to be allowed to engage in the conduct, which, without authorisation, could be in breach of competition laws,” Mr Ridgeway said.

“We are closely monitoring when to revoke any interim authorisations, including those granted because of the COVID-19 pandemic, and we expect them to cease when they are no longer appropriate. We also expect authorised parties to keep the ACCC updated of any relevant changes that impact their authorisation.”

The substantive application involved a request for the five car rental companies to collectively negotiate all terms and conditions (both price and non-price) related to the acquisition of airport space and services from Cairns Airport under licence and lease agreements, including a turnover percentage, car parking fees, rental payment and concessions.

The interim authorisation did not extend to entering into collectively negotiated agreements.

“Irrespective of ACCC monitoring in place of the arrangements, allowing the interim authorisation to continue during this period could involve some risk of adverse effects to the interest of Cairns Airport, during the extended review timetable for this matter. The car rental companies can easily and quickly re-apply for interim authorisation at any stage if it becomes necessary,” Mr Ridgeway said.

The ACCC extended the timetable to make a final decision on the application for authorisation by six months. It will seek feedback from interested parties at a later stage.

More information, including the ACCC’s revocation authorisation decision, is available at Car rental operators at Cairns Airport.

Background

On 28 November 2019, the ACCC received an application by six car rental companies seeking authorisation for 10 years in relation to negotiations for space, including counter space, car parking bays and shared facilities, at Cairns Airport. The ACCC conducted public consultations.

On 13 February 2020 the ACCC granted interim authorisation to WTH Pty Ltd trading as Avis Australia, Budget Rent a Car Australia Pty Ltd, Hertz Australia Pty Limited, CLA Trading Pty Ltd trading as Europcar, and Kingmill Pty Ltd trading as Thrifty Car Rental and Dollar Car Rental to prepare for negotiations, and negotiate with Cairns Airport Pty Ltd.

A sixth rental company, Redspot Head Office Pty Ltd (trading as Enterprise, Alamo, National and Redspot), withdrew its request for authorisation on 28 April.

On 26 March 2020, the ACCC issued a draft determination proposing to grant authorisation for five years and sought submissions from interested parties.

Notes to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

Broadly, the ACCC may grant a final authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.