On 13 February 2017 the Federal Court handed down its decision in REA Group Limited v Fairfax Media Limited1 which concerned allegedly misleading or deceptive advertising claims published by Fairfax Media Limited (Fairfax) which promoted a mobile telephone application operated by Fairfax’s wholly owned subsidiary Domain Group (Domain).
An issue which arose was whether qualifying information in footnotes to two of the advertisements were sufficiently prominent to counter misleading primary messages.
Domain is a digital and print media business which operates the property listings website www.domain.com.au, the associated mobile website, and the Domain mobile telephone application (Domain app).
REA Group Limited (REA) is a publicly listed digital media business which, amongst other things, owns and operates the property listings website www.realestate.com.au, the associated mobile website, and the Realestate.com.au app (REA app).
The newspaper advertisement
Fairfax published an advertisement on the front page of the Sydney Morning Herald (SMH) which described the Domain app as the “#1 property app in Australia” (Rating Claim) and stated that “the most property listings in Sydney are on Domain” (Listings Claim).
At the end of the Rating Claim was a small caret2 indicating the existence of a footnote which qualified the claims made on the front page of the SMH. The footnote was actually located on the second page of the SMH and qualified the Rating Claim by stating “as voted by consumers, All Versions rating via App Store and Google Play Store, February 2016. Manual listing count of established homes Domain versus realestate.com.au Sept 2015 to Jan 2016”.3
However, the caret which indicated the existence of the footnote was so small as to be barely perceptible and even it had been noticed it was unlikely that the readers would have thought that the caret signified a footnote as none was apparent at a glance at the front page.4
The headlines on the billboards
There were also a series of billboards in Sydney which featured the Listings Claim. The billboard advertisements also included a footnote which stated “listings counts of established homes Domain versus realestate.com.au Sept 2015 to Jan 2016.”
REA commenced proceedings against Fairfax on the basis that the publication of the advertisements constituted misleading or deceptive conduct and that Domain had made misleading representations relating to the supply of services in breach of ss18 and 29 of the Australian Consumer Law (ACL) in Schedule 2 of the Competition and Consumer Act 2010 (Cth).5
REA contended that the Rating Claim and Listings Claim conveyed the representations that the Domain app:
The Court held that when a reputable company like Domain accompanied a broad claim to have the number one property app in Australia with a specific claim to have the most listings in a particular area, the specificity of the claim results in the broader claim being more than just puffery.6
The Court held that the two advertisements each contained the primary message that the Domain app and website had more property listings in Sydney than any comparable app or website and that that message was likely to have some importance for many members of the target audience.7
The evidence established that the Domain app and website did not have more property listings overall in Sydney than the REA app and website at the relevant time, rendering the claim inaccurate.
Although the footnotes undercut the specific (and quantifiable claims) by limiting the claims to only established properties, the Court held that the qualifying footnotes were given no prominence and were unlikely to be read or taken in by an ordinary consumer,8 with the consequence that the primary message was held to be misleading or deceptive and the publication of the advertisements constituted conduct in breach of s 18 ACL.9
Under the ACL, businesses are not allowed to make statements that are incorrect or likely to mislead or deceive consumers.
While it is not uncommon for advertisements to contain qualifying information in fine print, the qualifying information must be sufficiently prominent if it is to effectively counter what might otherwise be a misleading (and contravening) primary message.
For further information or feedback on the article please contact James Steedman.
[1] [2017] FCA 91
[2] ie a small inverted ‘v’
[3] [2017] FCA 91, [60]
[4] ibid at [101]
[5] ibid at [1]
[6] A statement which no reasonable person will take seriously.
[7] [2017] FCA 91, [144]
[8] ibid
[9] ibid
