Legal Insights

Cost of living

Isabelle Heath
& Rebecca Power

• 11 February 2025 • 4 min read

With the cost of living pressures increasing for Australians, it is no surprise that last year, the ACCC focussed on competition and consumer law issues that impacted the price of essential products and services, such as housing, food and groceries, energy prices, financial services and transport. As a consequence, the ACCC commenced a number of high-profile court proceedings against several major Australian businesses, particularly in the aviation, travel and groceries sector, for misleading advertising practices.

Enforcement priorities

The ACCC’s 2024 enforcement priorities included a focus on easing the cost of living pressures on Australian consumers, who are experiencing price increases across a range of essential products and services. Specifically, the ACCC was focussed on anti-competitive conduct and misleading sales representations in the supply of essential goods and services through its:

12 month Supermarket Inquiry into competition in the supermarket and grocery sector, which commenced in February 2024 and published an interim report in September 2024; and
close consideration of consumer reports alleging false or misleading “was/ now” or other pricing “specials” advertised by supermarkets.

While the ACCC achieved some good results in 2024, we expected the ACCC to issue more infringement notices, given their promise of “louder, faster, stronger” outcomes for consumers. The ACCC was certainly “louder” in taking on big corporations like Qantas and Webjet and in achieving significant outcomes for consumers in the Qantas “ghost flights” litigation. However, we didn’t see much in the way of “faster” action or outcomes for consumers directly affecting the cost of living in 2025.

Major developments and activities

Qantas

Ghost flights litigation

In 2023, the ACCC commenced proceedings against Qantas, Australia’s largest domestic airline operator, for misleading consumers by advertising sale tickets for the now infamous “ghost flights” – being flights that Qantas had already decided to cancel. Almost 1 million consumers were said to have been affected by Qantas’ conduct. After initially vocally defending the proceedings, in May, Qantas agreed to pay a penalty of $100 million and establish a $20 million redress scheme for affected consumers. Consistent with the ACCC’s focus on ensuring “louder, faster, stronger” outcomes for consumers, the redress scheme will see Qantas pay compensation payments from $225 to $450 per flight and, at the conclusion of the program, if the total compensation payments do not reach $20 million, Qantas will donate the balance to a charitable organisation approved by the ACCC.

"This is a substantial penalty, which sets a strong signal to all businesses, big or small, that they will face serious consequences if they mislead their customers."

ACCC Chairperson, Gina Cass-Gottlieb

Webjet

Alleged misleading flight prices and practices

In November 2024, the ACCC commenced proceedings against Webjet, an online travel booking site, alleging Webjet made false and misleading representations about flight prices and bookings to consumers. The ACCC alleges that Webjet misled consumers between November 2018 and November 2023 by:

not disclosing additional fees and charges payable to Webjet when advertising flights; and
after taking payment, confirming a flight had been booked when, in fact, it had not been booked with the airline.

The case has not yet reached a final hearing but the ACCC is seeking, among other things a financial penalty and consumer redress. We expect the ACCC to seek a significant penalty having regard to the outcome in the case against Qantas and its focus on the aviation sector.

"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."

ACCC Chairperson, Gina Cass-Gottlieb

Supermarkets

Alleged misleading price claims

In September 2024, the ACCC commenced proceedings against Coles, alleging it had breached the ACL by misleading customers regarding discount pricing claims. The ACCC alleges that Coles would:

advertise products at a certain price for a period of time;
raise the price of that product; and
subsequently, advertise the products as being on sale even though the prices of those products were the same as or higher than the “original” price.

Coles is defending the claims, accusing the regulator of not understanding how grocery retailing works and also pointing the finger at suppliers for price changes.

"Many consumers rely on discounts to help their grocery budgets stretch further, particularly during this time of cost of living pressures. It is critical that Australian consumers are able to rely on the accuracy of pricing and discount claims."

ACCC Chairperson, Gina Cass-Gottlieb

Looking ahead

Going into 2025, we expect to see progress in the Webjet and the Coles Federal Court proceedings and potentially the commencement of further prosecutions for misleading and deceptive conduct against companies and businesses providing essential goods and services. Based on prior matters, we expect that Coles may settle the claim with the ACCC. Finally, we also expect to see a continued focus from the ACCC on achieving results for consumers with a much greater emphasis than under its previous leadership on consumer redress and compensation schemes.