The Webjet Group (ASX: WJL) share price is down 5% as the ASX travel share faces heat from the ACCC.
Webjet is an online travel agency (OTA), while the ACCC is the Australian Competition and Consumer Commission, Australia’s regulator of competition.
Webjet faces ACCC legal action
The ASX travel share announced to the ASX that the ACCC has commenced proceedings against Webjet Marketing Pty Ltd, which is a wholly owned subsidiary of Webjet Group.
The Australian Competition and Consumer Commission is alleging that Webjet Marketing engaged in “certain misleading and deceptive conduct in relation to the disclosure of its fees in advertising of airfares on social media, in emails and on its website/apps, as well as certain booking processes.”
The ACCC said:
The Applicant (ACCC) alleges Webjet engaged in false, misleading or deceptive conduct in breach of the Australian Consumer Law (ACL) by promoting flights at prices that were not available, and by confirming to some consumers that they had acquired ticket(s) at the price paid before subsequently requesting additional payments to complete the booking.
The ACCC is seeking a range of remedies including pecuniary penalties and Webjet said it is not yet possible to determine the financial implications of any outcomes from the proceedings.
Company comments
Webjet said its subsidiary has fully cooperated with the ACCC before the issue of these proceedings and has “already voluntarily and proactively undertaken a number of steps to further improve its disclosure of pricing and fees.”
The ASX travel shares said as far as Webjet Marketing is aware, the ACCC concerns do not relate to its current fee disclosure and pricing practices.
Webjet said it has always sought to provide great value and service to its customers, helping people compare flight prices and travel products transparently.
It noted millions of customers have chosen took through its systems during the period in question and it has “very rarely been contacted by customers complaining” about the disclosure of fees.
Webjet said it’s confident there is no widespread customer dissatisfaction with its offering, disclosure, service or pricing.
Final thoughts on the Webjet share price
It’s disappointing for shareholders that this has happened so soon after its result. The company may be able to successfully defend itself in court, so time will what happens and how much this affects what the business will do in the future. I still think the ASX travel share has a lot to offer for consumers, so it could be one of the ASX growth shares to watch at this lower price, but there are others that may do even better.