We explore the Federal Court’s $9 million penalty against Webjet for misleading consumers with hidden fees and false booking confirmations, highlighting the importance of transparent pricing and robust compliance systems.
The Federal Court has delivered its judgment in the ACCC’s long-running court proceeding with online travel agent Webjet Limited, handing down a $9 million penalty for conduct the Court described as serious and wide-reaching.
This is a timely reminder for businesses that the ACCC remains focused on headline prices that don’t disclose unavoidable fees, as well as business system failures producing inaccurate representations. Businesses should conduct regular maintenance checks and update their internal systems to ensure compliance with consumer law, and to minimise the risk of inadvertent breaches that could arise from outdated or faulty systems.
Below, we recap what went wrong for Webjet, outline the Court’s orders, and flag the practical take-aways for businesses that advertise online or rely on automated booking, inventory or pricing platforms.
Hidden fees
Between November 2018 and November 2023, Webjet charged a compulsory ‘Webjet Servicing Fee’ and ‘Booking Price Guarantee’ ranging between $34.90 and $54.90 for every booking made by a consumer.
During the same period, Webjet advertised airfares as ‘$XX*’ on its website, mobile application, promotional emails and social media posts. The asterisk linked only to vague statements (e.g. ‘subject to change’, ‘T&Cs apply’) that never revealed the extra fees.
The Court accepted (on Webjet’s admissions) that the practice was misleading under sections 18 and 29 of the ACL as customers thought they could fly for the headline price, but the additional fees were unavoidable.
Phantom confirmations
Airline inventory moves in real time. When a fare sold out between selection and payment, Webjet admitted that its system should have issued a ‘Customer Service Advice’ stating that Webjet was unable to confirm the booking but would attempt to do so manually. Instead, a back-end glitch in Webjet’s system produced 118 instances (between 10 February 2019 to 1 April 2024) where customers received emails or on-screen messages confirming flights that did not exist. The Court found these ‘Confirmed Booking’ messages were also misleading and false under the ACL and noted the impact of these misrepresentations, particularly the inconvenience and additional fees affected consumers were required to pay to secure alternative flights, as well as the financial losses resulting from non-refundable accommodation bookings.
The orders
The Court ordered:
- $9M in pecuniary penalties;
- a corrective notice on the Webjet home page for 60 days;
- a compliance program, involving independent review and ongoing maintenance of Webjet’s ACL compliance framework; and
- $100,000 to the ACCC’s costs.
The Court’s penalty decision
The Federal Court accepted the jointly proposed penalty sum of $9 million, noting that the conduct took place over five years across three platforms, with misleading price claims seen millions of times. 118 booking confirmation breaches (under 1% of bookings) were traced to a long-standing systems glitch, with 95 affected customers paying about $30,000 in additional fares, as well as non-economic harm including wasted time and lost opportunity to shop around. The penalty equates to roughly 9% of Webjet’s average annual revenue.
The Court considered that a company of Webjet’s scale was expected to detect and fix the technological failure much earlier, whereas Webjet staff had misunderstood disclosure rules and compliance systems failed.
Key takeaways – drip pricing under the spotlight
‘Drip pricing’ – where businesses advertise a low price but reveal unavoidable fees only late in the purchase process – remains firmly on the ACCC’s radar. The Webjet decision, following similar action against Dendy Cinema, reinforces that:
- Drip-pricing is a key enforcement area for the ACCC. All compulsory and unavoidable fees must be included upfront in the displayed price. Hiding them behind an asterisk or revealing them only at checkout is not enough.
- System errors that mislead customers, such as false booking confirmations, can also contravene consumer law. Businesses need strong compliance systems and must act quickly to fix any issues.