Webjet agrees to pay $9m fine to resolve Federal Court proceedings
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The news: Travel booking site Webjet Group has reached an agreement with the Australian Consumer and Competition Commission (ACCC) to resolve court proceedings against its wholly owned subsidiary Webjet Marketing, after the regulator alleged the company made misleading claims about airfare prices and flight bookings.
The numbers: Webjet Marketing and the ACCC will make joint submissions to the Federal Court, including orders requiring Webjet to pay a proposed a $9 million penalty and contribute $100,000 to the regulator's costs.
Webjet shares were down 1.8% to 69.8 cents at 12:30pm AEDT.
The context: The ACCC commenced proceedings in the Federal Court in November, claiming Webjet breached the Australian consumer law when it made statements on its app, in marketing emails, on social media and on its website about the minimum price of airfares that omitted compulsory fees.
Webjet is also alleged to have breached consumer law by displaying a confirmation page online and sending a confirmation email after taking payment for a completed flight booking, even though it had not actually booked the flight with the airline.
As part of the agreement announced today, Webjet will publish a corrective notice in a form agreed with the ACCC for a period of 60 days. It will also review, maintain and continue to implement an Australian Consumer Law compliance program.
Webjet said the impact of the proposed penalty will be recognised as an expense in the group's full-year financial report.
The Federal Court will consider the joint submissions and make orders in relation to the proposed penalty, with a hearing date yet to be fixed.
The source: ASX
