Carsales.Com Limited v One Way Traffic Limited
[2015] VSC 367
•28 July 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S ECI 2015 000224
| CARSALES.COM LIMITED ACN 074 444 018 | Plaintiff |
| v | |
| ONE WAY TRAFFIC LIMITED ACN 150 757 574 TRADING AS CARSGUIDE.COM.AU | Defendant |
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JUDGE: | JUDD J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 13 July 2015 | |
DATE OF JUDGMENT: | 28 July 2015 | |
CASE MAY BE CITED AS: | Carsales.Com Limited v One Way Traffic Limited | |
MEDIUM NEUTRAL CITATION: | [2015] VSC 367 | First revision: 29 July 2015 |
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CONSUMER LAW – Misleading or deceptive conduct – False or misleading representations – Relevant legal principles – Television, radio, internet and billboard advertisements – Alleged representations as to provision of consumer’s contact details to car dealerships – Whether representations conveyed – Whether representations likely to mislead or deceive – Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law, s 18.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Dr J P Moore QC Ms C E Klemis | Minter Ellison |
| For the Defendant | Mr A J Ryan SC | Allens |
HIS HONOUR:
Introduction
This proceeding was commenced on 25 June 2015. The parties sought an early adjudication of liability. With the cooperation of the parties and their legal representatives, the proceeding was expedited for trial on 13 July 2015. Thus, the parties avoided a contested application for interlocutory relief.
When framing its case in its statement of claim, the plaintiff pleaded seven representations based upon a comparative advertising campaign conducted by the defendant. The plaintiff, Carsales.com Limited, and defendant, One Way Traffic Limited, are competitors in the same market. They both maintain internet‑based advertising platforms for new and used car dealerships and private sellers. They invite potential buyers to engage with a seller in the hope that sales will be generated.
The defendants advertising campaign, conducted from 15 June 2015, sought to compare the way in which each dealt with a buyer’s contact details. The campaign comprised two television advertisements, three radio advertisements, a newspaper advertisement and a billboard advertisement.
While the parties do not agree on the representations conveyed by the advertising campaign, they agree that any representations made were made in trade or commerce, within the meaning of section 2 of the Australian Consumer Law.
The defendant contended that the ‘dominant message’ conveyed by the advertising campaign was to draw a distinction between the manner in which the plaintiff and defendant dealt with contact details entered by a buyer on their respective websites. It contended that the crucial point of difference was that the plaintiff sold buyer contact details to its client car dealers, while the defendant did not.
At trial, the plaintiff contended that the dominant message of the campaign was that, whenever a buyer enquired about a car on the plaintiff’s website, unbeknown to that person, the plaintiff sold the buyer’s contact details to multiple dealers. By comparison, the defendant represented that it treated buyers differently, because it was not in the business of selling contact details to dealers.
Under the plaintiff’s fee regime, applicable to most of its dealer clients, a small fee became payable once contact information, entered on its website by a member of the public, was collected and passed on to the dealer client. In an attempt to justify or explain the purpose of its advertising campaign, the defendant argued that there was a clear incentive for a car dealer to get value for the price paid to the plaintiff for each set of contact details or ‘leads’, and to attempt to make a sale, whether the buyer welcomed such contact or not. The defendant sought to contrast the way in which it did business, by characterising its business model in altruistic terms.
The defendant suggested that it had turned its face against a business model which provided car sellers with an incentive to contact and ‘harass’ potential buyers who, by providing contact details, expressed an interest in a particular vehicle for sale on its website. The defendant claimed that its model provided buyers with the opportunity to inspect a motor vehicle anonymously, without intrusion by a salesman.
The defendant maintained that buyers became annoyed or were resistant to contact from dealers initiated through the website. The defendant apparently aspired to a model that reflecting a return to a less pressured past era, when buyers could attend a dealer’s place of business to look at cars without the risk of ‘harassment’, because no contact details had been sold to the dealer. Thus, under its business model, the defendant’s dealer clients would not be motivated to harass the buyer to make a sale, because the dealer had not paid for a ‘lead’.
From a buyer’s perspective, anonymity may seem desirable. But both business models reflected the reality, that a passive, altruistic model would not suit new and used car sale businesses. Contract documents of both parties reflected a business model under which buyer information was a valuable marketing tool. The defendant’s client dealers received buyer contact information and paid fees, even though there was no fee directly attributable to the supply of the information. Data collection through the websites, and the supply of buyer contact details to dealer clients, was a crucial ingredient of each business model.
The defendant’s attempt to explain or justify the purpose of its advertising campaign was unpersuasive. It was superficial and internally inconsistent. It would be fanciful to conclude that the defendant was disinterested in the value to its client dealers of marketing information in the nature of buyer details. The plaintiff and defendant are in the business of providing dealers with a website based marketing service to sell motor vehicles. Both charge fees for their services, although the contractual arrangements and fee regimes are different. In each case, the success of their respective business enterprises will depend upon their success in generating sales for client dealers, as well as private sellers. I do not accept the defendant’s altruistic explanation of its business model.
The motive or purpose of a party conducting an advertising campaign may inform the meaning of words or conduct, but cannot be decisive. An advertiser may intend to achieve a particular objective, or reach a particular market with a laudable message, but engage in misleading or deceptive conduct because of a meaning which is reasonably open. This case does not concern unintended meanings. On the contrary, the defendant opportunistically seized upon one characteristic of the plaintiff’s fee regime — the timing of a payment — around which to create a comparative advertising campaign. The defendant’s purpose, evident from the advertising campaign, was to frighten away potential and existing users of the plaintiff’s website with false or misleading messages in which the plaintiff was portrayed as dishonest, untrustworthy and opportunistic.
The defendant’s advertising campaign
Television Advertisement One
The first television advertisement ran for 15 seconds. A man was portrayed standing over the words ‘carsales.com.au’. A woman was portrayed standing over the words ‘carsguide.com.au’. The man was middle aged, and slightly overweight. He was dressed in beige coloured pants, with a brown jacket, and a badly tied, brown, striped neck-tie. He was presented as badly dressed, loud and aggressive. In contrast, the woman was young and neatly dressed and moderate in her behaviour. The man said:
When you enquire about a car with us, we sell your contact details straight to the dealer.
He then laughed maniacally. An animated flying saucer appeared and he was beamed up into the flying saucer. The impression conveyed is that the plaintiff had misbehaved. The woman then said:
At carsguide, we don't sell your details to dealers ever. We sell cars, not your details.[1]
[1]Emphasis added.
Television Advertisement One was published 159 times from 15 June 2015 to 3 July 2015.
Television Advertisement Two
The second television advertisement ran for about the same duration as the first. As in the first television advertisement, the same man and woman were portrayed standing over the words ‘carsales.com.au’ and ‘carsguide.com.au’ respectively. This time, however, the man was holding a wooden staff, and struck the ground. He said:
You shall not pass until you’ve handed over all your contact details.
He struck the staff on the ground.
The woman then said:
At carsguide, we’re not precious. We give you the dealer’s details and location upfront. Call dealers on your terms at carsguide.com.au.[2]
[2]Emphasis added.
Television Advertisement Two was published 146 times from 15 June 2015 to 3 July 2015.
Radio Advertisement One
The first radio advertisement ran for 31 seconds. In its original form, it was published from 15 June 2015 to 28 June 2015. It began with a female voice:
Ok James, tell me where all this anger comes from.
A man then said:
It’s ridiculous! I enquired about one [BEEP!] car and [BEEP!] they made me hand over my contact details then they sold them to a dealer. Can you believe that? It’s absolute [BEEP!].
The woman then said:
You probably didn’t know that carsales sell your contact details to dealers. So if that gives you the [BEEP!] try carsguide.com.au where we sell cars, not your details.[3]
[3]Emphasis added.
An amended version was published from 29 June 2015 to 3 July 2015, as follows:
[female voice] Ok James, tell me where all this anger comes from.
[male voice] It’s ridiculous. I tried to enquire about one car. They [BEEP]-ing made me hand over my contact details. Then they sold them to the dealer. Can you believe that? It’s absolute [BEEP]!
[female voice] You probably didn’t know that Carsales sell your contact details to the dealer. So if that gives you the [BEEP], try CarsGuide.com.au, where we sell cars, not your details.[4]
[4]Emphasis added.
The material change is the substitution of ‘dealer’ for ‘dealers’. Radio Advertisement One was published 57 times from 15 June 2015 to 28 June 2015. The amended version was published 22 times from 29 June 2015 to 3 July 2015.
Radio Advertisement Two
The second radio advertisement ran for 30 seconds. In its original form, it was published from 15 June 2015 to 28 June 2015. It began with a telephone ringing. A middle‑aged female voice said:
Hello
A younger sounding female voice said:
Hey Mum, how’s it going?
The mother then said:
Hello darling. Yes, I’m alright. Well, actually no. I’m buying a car at the moment and the [BEEP!]sold my [BEEP!]contact details to the dealers[5] just because I enquired about a car they had listed. It’s just [BEEP!] rude.
A third female voice then says:
You probably didn’t know that carsales sell your contact details to dealers. So if that gives you the [BEEP!] try carsguide.com.au where we sell cars, not your details.[6]
[5]Emphasis added.
[6]Emphasis added.
An amended version of this advertisement was published from 29 June 2015 to 3 July 2015:
[mother] Hello?
[daughter] Hey Mum, how’s it going?
[mother] Yes I’m alright. Well, actually no. I’m buying a car at the moment and the [BEEP] sold my contact details to the dealer, just because I tried to enquire about the car they had listed. It’s just [HONK]-ing rude!
[female voice] You probably didn’t know that Carsales sell your contact details to the dealer. So if that gives you the [BEEP], try CarsGuide.com.au, where we sell cars, not your details.[7]
[7]Emphasis added.
Once again, the material change was to substitute ‘dealer’ for ‘dealers’. Radio Advertisement Two was published 54 times from 15 June 2015 to 28 June 2015. The amended version was published 28 times from 29 June 2015 to 3 July 2015.
Radio Advertisement Three
The third radio advertisement ran for 30 seconds. In its original form, it was published from 15 June 2015 to 28 June 2015. With Sitar music playing in the background, a man says:
And breathe in and out, clearing your mind of all negative thoughts, like the [BEEP!] [BEEP!] who sold your contact details to dealers, all because you were simply enquiring about [BEEP!] car.[8]
A woman then says:
You probably didn’t know that carsales sell your contact details to dealers. So if that gives you the [BEEP!] try carsguide.com.au where we sell cars, not your details.[9]
[8]Emphasis added.
[9]Emphasis added.
An amended version of the third radio advertisement was published from 29 June 2015 to 3 July 2015, containing a similar change as was made with the first two radio advertisements:
[male voice] And breath in. And out. Clearing your mind of all negative thoughts. Like those [BEEP] at [BEEP] who sold your contact details to the dealer. All because you tried to enquire about a car.[10]
[female voice] You probably didn’t know that Carsales sell your contact details to the dealer. So if that gives you the [BEEP], try CarsGuide.com.au, where we sell cars, not your details.[11]
[10]Emphasis added.
[11]Emphasis added.
Radio Advertisement Three was published 54 times from 15 June 2015 to 28 June 2015. The amended version was published 27 times from 29 June 2015 to 3 July 2015.
Billboard advertisement
The defendant erected a billboard situated adjacent to the plaintiff’s premises at 449 Punt Road from about 15 June 2015. The billboard stated:
Let lightning strike those who sell your contact details to dealers.[12]
[12]Emphasis added.
On 20, 21, 26, 27, 28, 29 and 30 June 2015, the defendant tethered a balloon which featured a representation of a lightning strike. The balloon was flown over the plaintiff’s premises, with the effect that the representation of the lightning appeared to be pointing towards the plaintiff’s premises. The balloon did not appeared after 3 July 2015.
Newspaper advertisement
An advertisement appeared in newspapers on various dates between 15 June 2015 and 30 June 2015. The advertisement stated:
The Newspaper Advertisement was published in The Daily Telegraph (Sydney) on 19 June 2015, The Sunday Mail (Brisbane) on 21 June 2015, the Sunday Herald Sun (Melbourne) on 21 June 2015, The Sunday Times (Perth) on 21 and 28 June 2015, The Courier Mail (Brisbane) on 24 June 2015, the Herald Sun (Melbourne) on 22, 23, 25 and 29 June 2015, and The Advertiser (Adelaide) on 25 June 2015.
Facebook advertisement
On 26 June 2015, a video was posted on the defendant’s Facebook page and YouTube. The video was entitled ‘Lightning never strikes the same place twice, huh?’ and contained the following text:
Let lightning strike those who sell your contact details to dealers.[13]
[13]Emphasis added.
The video displayed the billboard advertisement, including the lightning strike balloon floating above the billboard advertisement and the plaintiff’s premises.
The following is a screenshot from that video:
Representations
The ensemble of representations pleaded by the plaintiff in its statement of claim were further developed and refined in the course of the short trial. So too was the defendant’s defence. Both parties took a practical view, advancing their respective cases by affidavit, brief cross-examination, and written and oral submissions. No party expressed surprise, or claimed to have been disadvantaged, by any departure from the strict form of the pleadings.
The seven representations alleged by the plaintiff were as follows:
(a) the plaintiff provided buyer contact details to dealers without the knowledge or authority of the buyer;
(b) the defendant did not provide buyer contact details to dealers, whereas the plaintiff did;
(c) the plaintiff sold buyer contact details to dealers;
(d) when a buyer provided the plaintiff, through its website, with contact details, the plaintiff provided those details to multiple dealers, not just the dealer to whom the enquiry was directed;
(e) when a buyer provided the plaintiff with contact details, they were always provided to dealers;
(f) there was a benefit to buyers in using the defendant’s website rather than the plaintiff’s website in relation to the use made of contact details; and
(g) a buyer using the plaintiff’s website is unable to contact the seller without providing his or her contact details.
Legal principles
The legal principles applicable to an allegation that advertising material is misleading or deceptive, or is likely to mislead or deceive, was not in dispute. As Gordon J said in Australian Competition and Consumer Commission v Telstra Corporation Ltd,[14] the principles have been well traversed by Australian courts. Her Honour thereafter set out a useful summary of the two step analysis required. It is unnecessary to recite those passages.
[14][2007] FCA 1994, [14]–[20].
Where an advertisement is capable of more than one meaning, the question of whether it is misleading or deceptive is to be tested against each meaning which is reasonably open.[15] Comparative advertising does not involve any different approach, although by engaging in such conduct an advertiser may become exposed to the risk that a seemingly innocuous statement will become coloured or informed by the comparison.[16]
[15]Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 per Hill J, [50]; ACCC v Coles Supermarkets Australia Pty Ltd (2014) 317 ALR 73, [46]–[47]. See also Telstra Corporation Ltd v Singtel Optus Pty Ltd [2014] VSC 35, [29]–[35].
[16]Gillette Australia Pty Ltd v Energiser Australia Pty Ltd (2002) 193 ALR 629, [44]; Andale Repetition Engineering Pty Ltd v Hoshizaki Lancer Pty Ltd [2011] VSC 496, [13]; Specsavers Pty Ltd v Luxottica Retail Australia Pty Ltd [2013] FCA 648, [49]; Specsavers Pty Ltd v Optical Superstore Pty Ltd (2010) 276 ALR 569, [1].
Background
The parties cooperated in the preparation of a statement of agreed facts, which described the operation of their respective business models. As at 26 June 2015, 213,681 cars were advertised for sale on the plaintiff’s website at carsales.com.au, and 110,538 cars were advertised for sale on the defendant’s website at carsguide.com.au. Of those cars advertised on carsales.com.au, approximately 64 per cent were advertised by dealers and 36 per cent by private sellers. The parties accepted that they operated in the same market, advertising new and used cars to the public. The majority of vehicles were advertised by dealers, who must be regarded as their major client base. Advertising fees were paid to the plaintiff and defendant by dealers and private advertisers.
Both websites enabled, for most cars advertised, a prospective buyer to submit an online enquiry to the seller in relation to a particular car through the website. When an online enquiry was made by a buyer, both electronic platforms automatically transmitted buyer contact details to the seller, enabling the seller to respond to the buyer’s enquiry. On each website, a buyer could usually choose to contact the seller by telephone.
The plaintiff’s website
On the carsales.com.au website, if a buyer wished to enquire about a particular car, he or she could either contact the seller by calling a telephone number displayed on the right hand side of the webpage (if the seller had elected to be contacted by telephone); or send an enquiry to the seller by filling in their contact details and clicking the ‘Send Enquiry’ button.
For most cars advertised for sale by dealers, a telephone number was displayed beside the advertisement for the vehicle. The telephone number was operated by the plaintiff. When the buyer called the number, the following recorded message was played:
Hello, and thank you for calling carsales.com.au. To be connected to the car sales dealership advertising this vehicle please enter the code on the screen followed by the hash key.
If the number from which the call was made had a ‘blocked caller ID’, the caller was prompted to enter his or her telephone number. When the code was also entered entered, the buyer’s call was connected to the specific dealer. Through this process, the plaintiff was able to collect and pass on the telephone details of the buyer to the particular dealer who advertised the car. Alternatively, a buyer might choose to send an enquiry to the dealer by entering his or her contact details (comprising name, phone, email and postcode) in the section provided beside the advertisement.
Since on or about 23 June 2015, the following words, or words of like effect, have appeared directly below the words ‘Enquire on this car’:
The dealer’s contact details will be emailed to you after enquiring. Your details will only be sent to the seller of this car and no one else.
It was common ground that even before this notice appeared, the plaintiff did not provide contact details to any other dealer. By clicking on the enquiry section (and before any personal information is entered) a checkbox with the words ‘Confirm dealer's response’ appears. Next to those words an information icon will appear. When the mouse is placed over the information icon, the following words appear:
We’ll check in with you with a short questionnaire in 24 hours to confirm the dealer has responded to this enquiry...
At all relevant times, and for the duration of the defendant’s advertising campaign, the above words have appeared upon clicking into the enquiry section. Accordingly, a buyer is informed that his or her details will be provided to the dealer, and that a dealer response is expected.
Once a buyer has entered their contact details, the buyer is invited to click the large box containing the words ‘Send Enquiry’, which will cause the details to be sent electronically (sometimes by SMS) to the dealer who advertised the car for sale. The contact details of the dealer are also sent electronically to the buyer.
In the case of a private sale, the seller's first name and suburb is displayed under the heading ‘Seller's Details’. At the top of the ‘Enquire on this car’ section it states:
Your details will only be sent to the seller of this car and no one else.
The buyer might telephone the seller in one of three ways, depending on the seller's election when the car is listed for sale, including if the seller has elected to be contacted by telephone. By clicking on the ‘View’ button next to the words ‘Seller's phone number’:
(a) the seller’s telephone number will be displayed;
(b) a ‘Privacy Protect’ telephone number will be displayed. When the telephone number is called by the buyer, the call will be connected to the seller’s telephone number; or
(c) the buyer will be prompted to enter their mobile telephone number. Once the mobile telephone number has been entered, the buyer will be sent a text message containing a code. When the code is entered into the webpage, the seller’s telephone number will be displayed. This process was designed to protect the seller from fraudulent enquiries.
When the buyer’s contact details are entered, they are sent electronically to the private seller (and only to that seller). The details are not supplied to any dealer or any other person.
The defendant’s website
A buyer making an enquiry on the defendant’s website can enquire about a particular car in the following ways. For a car advertised by a dealer:
(a) the dealer’s name and suburb (but not telephone number) is usually displayed below and on the right hand side of the advertisement;
(b) upon clicking ‘View seller location and details’ or ‘Seller location’ the following appears:
Dealer – [ABC Motors]
Address : [549 Motors Rd, Motorville, NSW]
Phone* [02 8224 0868]
The telephone number displayed is operated by the defendant. Should the buyer call the number, he or she will be prompted to enter a car ID. If the call is made from a telephone number with a blocked caller ID the caller is not prompted to enter their telephone number, and the call will be redirected to the dealer. When a buyer’s telephone number is not blocked it is provided by the defendant to the dealer.
On all occasions, the buyer may enter his or her contact details, comprising name, email and phone number. Provision of the buyer’s phone number is optional, and the website states this. The defendant provides contact details supplied by the buyer to the dealer who advertised the car, but not to any other dealer.
Since 11 June 2015, the following statement has appeared below the ‘Contact this seller’ button on the Carsguide website:
When you use this enquiry form your contact details will be forwarded to the seller so they can contact you directly. Carsguide do not sell your details or make money from this service.[17]
[17]Emphasis added.
In the case of a private seller, when the buyer clicks on ‘Seller Location’ or ‘View seller location and details’, the buyer is taken to another page which displays the seller’s name and suburb. The buyer may then click ‘Contact Seller’, and will be prompted to either enter his or her contact details (which will be sent by the defendant to the seller), or call the seller, by entering the buyer’s mobile telephone number. Once the number has been entered, the buyer will be sent a text message containing a code. Once the code is entered, the seller’s telephone number will be displayed.
The defendant does not provide a buyer’s contact details to anyone other than the seller of the car in respect of which the enquiry is made.
For most cars advertised by dealers, buyers accessing the defendant’s website are not required to provide any contact details in order to view the name and address of the dealer. But whenever a buyer calls the plaintiff or defendant’s call numbers, in respect of a dealer‑advertised car, unless with a blocked caller ID, both the plaintiff and defendant provide the number to the dealer. Whenever a buyer calls a number provided by the plaintiff or the defendant using a blocked caller ID, no contact details are provided to the dealer unless, in the case of the plaintiff, the caller manually enters his or her phone number.
Thus, both plaintiff and defendant provide caller information to the dealer client. The defendant contended that the information provided on its website enable a buyer to locate a dealer without making contact.
Charging models
The defendant emphasised the differences between the business models, and in particular, that it did not charge its clients — the dealers — any fee payable on the transmission of buyer contact details. The plaintiff and defendant have different charging models, although both derive income from services offered to car dealers, private sellers and website advertisers.
Private sellers advertising on the plaintiff’s website are charged a onetime upfront fee which covers the advertisement of their car for sale on the website and other additional services including ‘Price Assist’, ‘Comment Kick‑starter’, a for‑sale sticker and weekly emails with updates and performance tips. The fee and services will depend on the advertising package selected by the seller (standard, premium or premium plus).
There are two options for dealers subscribing to the plaintiff’s website — these are known as the ‘leads’ model and the ‘listings’ model.
Approximately 75 per cent of the plaintiff’s dealer customers choose a leads model, under which the plaintiff charges a onetime establishment fee, a monthly subscription fee, a fee for lead delivery, and management services. In return, the plaintiff provides dealers with access to its website platform for advertising, with the ability to upload photographs, and provide a description of the car for sale.
The ‘lead’ delivery and management services provided by the plaintiff includes a lead management system known as ‘Autogate’, which is an online system accessed by dealers to manage and assign leads to a specific salesperson. Leads are automatically entered into the Autogate system when a dealer receives a telephone call from a buyer, redirected from the telephone number supplied by the plaintiff on its website. Leads are also entered into Autogate when a buyer completes an online ‘Send Enquiry’ form. The plaintiff’s ‘leads’ management system also included a function to contact a buyer to ensure their enquiry has been actioned, and escalate the enquiry with the dealer if it has not. It can produce quarterly business reviews which summarised response rates and closing rates. It is open to a dealer to pay an additional fee to use Autogate to manage other leads, such as those generated by the defendant’s website.
Under the leads based model, dealers pay fees to the plaintiff in exchange for a bundle of services. One fee is payable on the transfer of a lead to the dealer. It is that fee which was the focus of the defendant’s advertising campaign.
For those dealers who choose a ‘listings’ based model, the plaintiff charges a onetime establishment fee, a monthly subscription fee (which is optional, depending on the package selected) and a listing fee per vehicle per 30 days.
Until January 2015, the defendant also charged dealers on a leads model basis. Since then the defendant has charged fees based on the number of views by the public of a particular advertisement on its website (up to a capped amount), irrespective of whether a view results in a lead. Even so, the defendant continues to provide contact information to dealers. The defendant also charges other fees to sellers for enhanced listing services.
Effect of advertising campaign
Both parties placed emphasis on the dominant message conveyed by the orchestrated multimedia campaign. That was appropriate, although they characterised the campaign differently.
Notwithstanding the modification to the radio advertisements on 29 June, the overwhelming impression conveyed through the advertising campaign, considered as a whole, is that the plaintiff is engaged in the unauthorised trafficking of a buyers’ confidential information to multiple car dealers for profit. The consistent theme is that the plaintiff is engaged in wrongful or immoral conduct, which ought to be condemned according to ordinary standards, and is not to be trusted with confidential information. The campaign is obviously designed to tap into public concern about the misuse of personal information used or made available on the internet.
The defendant agreed that the plaintiff did not convey any buyer information to a dealer other than the dealer to whose advertisement the buyer responded. It relied on the modification made to the radio advertisement on 29 June, and a close analysis of the particular words used in each other advertisement, to argue that the ‘trafficking’ representation was not reasonably open.
Television Advertisement One
When the first speaker in Television Advertisement One said, ‘We sell your contact details straight to the dealer’, his demeanour, including the timing of his laughter, conveyed to the public that use of the information was sharp, tricky and a joke on the consumer, who had not authorised and was unaware of the conduct. The second speaker drew a comparison, portraying a moderate, straightforward image, claiming, ‘At Carsguide, we don’t sell your details to dealers ever. We sell cars, not your details.’
The words used by the first speaker in the advertisement, closely analysed and in isolation from the actor’s demeanour, and the words spoken by the second speaker, might convey no more than that the plaintiff sold contact details to a dealer. But context is all important. The dominant message is unmistakable. The reference to ‘the dealer’, to indicate a limited transfer of information, would not resonate with members of the public in the context of the whole campaign. Even taking that limited expression at face value the meaning conveyed was that the plaintiff was in the business of dealing with confidential information in a manner that was unauthorised, something the defendant would never do. The second speaker implied that the defendant did not engage in the same sharp, tricky and reprehensible conduct as the plaintiff.
In my opinion, a reasonable member of the public considering use of a website to purchase a motor vehicle might reasonably interpret the advertisement to mean that the plaintiff would deal with his or her confidential information by an unauthorised sale for profit; that the plaintiff was in the business of selling private contact details without the knowledge or approval of the buyer. The plaintiff’s website, once opened by a potential buyer, made it plain that buyer contact details introduced into the relevant fields on the website, would be provided to the particular dealer. Those familiar with that information on the plaintiff’s website may become confused by the advertisement, which may suggest to them that the plaintiff was engaged in something underhand, and was not to be trusted.
The real injury done by the first television advertisement is to dissuade members of the public from approaching the plaintiff’s website. In this context, I note that the defendant claimed on its website that it did not ‘make money from this service’. That claim is ambiguous, and in the context of the advertising campaign, is at least misleading. The defendant makes money from service provided to client dealers that includes the transmission of buyer contact data. The plaintiff does not, however, make any complaint about that representation in this proceeding.
The difference between the conduct of the plaintiff and defendant is, according to the defendant, the absence of any sale by the defendant of contact information. But the defendant did not attempt to address that part of the representation to the effect that contact information was provided to the dealer without the knowledge or authorisation of the buyer. A buyer, utilising the plaintiff’s website, could not have been under any misapprehension that contact information was provided for the purpose of enabling the dealer to make contact. But in the absence of that experience and knowledge, a buyer choosing between websites might easily be misled into believing that the plaintiff would deal with contact information in a manner that was unauthorised.
The plaintiff’s practice of charging a fee for each lead was elevated by the defendant into a proposition that the plaintiff’s fee regime was as a fraud on the buyer. The advertisement characterised the fee as accompanied by misuse of confidential information; with the plaintiff profiting from an unauthorised sale of confidential data.
The plaintiff argued that it was quite wrong of the defendant to characterise the transaction between it and its client dealer in isolation, as one involving the sale of contact details for a fee. While there was a fee charged by the defendant for a lead, the defendant derived income from providing a service that included the provision of contact information. The defendant’s advertising campaign implied that it did not provide contact information. By representing that they did not engage in the same conduct as the plaintiff, the defendant also implied that it derived no financial benefit from the provision of contact details. Those representations are misleading. In my opinion the provision of contact information by the plaintiff and defendant to client dealers was a material part of the package of services each offered.
In the context of the overall advertising campaign, with its emphasis on the sale of contact details, the words and images of the first television advertisement conveyed a representation that the plaintiff was engaged in unauthorised dealing with confidential buyer contact details, by selling them to dealers. The defendant concedes that the contact details are not provided to dealers other than the one with whom contact was sought to be made. At the same time, the defendant implied that it did not provide contact information to dealers or at least that it was not part of its business to do so. The defendant did provide such information as part of its business.
Television Advertisement Two
The visual impact is of a man using a loud and aggressive voice, augmented by a large stick striking the ground, issuing a command that access requires a buyer to hand over contact details. The aggressive demeanour is accompanied by laughter. The second speaker, neatly dressed with a reasonable and moderated tone, is in stark contrast. The words used by the second speaker inform the meaning conveyed by the first speaker, when seeking to draw a comparison.
The more direct message conveyed is that the plaintiff required the buyer to hand over contact details before he or she is able to make contact with the dealer, or find out who or where it is. That representation is misleading. Contact may be made by telephone in the absence of providing the full suite of contact details supplied under the option available by clicking the ‘Send Enquiry’ button.
The comparative statement is to the effect that the defendant provided no information to the dealer. The second speaker said the contact is ‘on your terms’. The comparative representation is misleading. Communication with the dealer, through the defendant’s website, other than by a caller with blocked caller ID, or a person who might choose to attend at a dealer’s premises anonymously, involved the provision of information and other data communicated to the dealer by the defendant as part of a service for a fee.
Radio advertisements
The radio advertisements followed a similar pattern to television, and conveyed similar representations. A buyer expressed outrage at the sale of contact details to a dealer. In fact, contact details introduced onto the plaintiff’s website by a buyer are provided in circumstances where they are known and intended to be conveyed to the dealer to enable communication. In such circumstances, the expressions of anger and outrage convey the impression that the plaintiff is doing something that is unauthorised or at least morally reprehensible.
In my view the meaning conveyed, and intended to be conveyed, is that the plaintiff was engaged in unauthorised dealing with buyers’ confidential information for profit. That representation is untrue. The defendant conceded that the plaintiff did not provide the contact details to any person other than the dealer with whom contact is sought by the buyer.
The change that occurred on 29 June 2015, to substitute for ‘dealers’ the word ‘dealer’, did not eliminate the offending features of the advertisements. The defendant would have the court approach the analysis of the words as if interpreting a statute. That is not the approach to be taken in these circumstances. The authorities make that plain. A member of the public might reasonably interpret the words of the second speaker to mean that the defendant did not provide contact details to dealer clients as part of its business. That representation was false.
The billboard and video
The advertising on the billboard did not set out to draw any comparison between the plaintiff and defendant’s conduct. Rather, it condemned, as unlawful or morally reprehensible, the sale of contact details to dealers. The message conveyed was that the plaintiff was engaged in the business of unauthorised or unlawful trafficking of private information.
The use of the balloon with the lightning rod emphasised the immorality of the plaintiff’s conduct. The unmistakable meaning, conveyed by the words to potential users of the plaintiff’s website, was that the plaintiff would deal with a buyer’s confidential information without his or her knowledge or authority, by selling it into the dealer market.
The defendant argued that buyers would be justifiably outraged to learn that their personal details had been sold for a fee even to the individual dealer with whom they sought to make contact. The picture of outrage painted by the defendant was opportunistic confection. The defendant also charged fees for a package of services, which included the provision of contact details. The hyperventilation involved in the billboard, by which the defendant elevated one element of the plaintiff’s fee structure with its clients as morally reprehensible, conveyed a representation that the plaintiff misused buyer confidential information by selling it into the dealer market.
Newspaper advertisement
The newspaper advertisement, once again, is unambiguous in its message. It conveyed the clearest impression that the plaintiff misused buyer contact details, profiting from that misuse; while on the other hand, the defendant never engaged in such conduct. First, the plaintiff did not, as the defendant accepted, provide contact details to anyone other than the dealer with whom the buyer intended to make contact. Second, the defendant also provided contact details under contractual arrangements that involve the payment of money. Both representations were false or misleading.
Conclusion
In my opinion the plaintiff has established that the defendant’s advertising campaign as a whole, through its dominant message, and in each of the advertisements considered separately, represented that the plaintiff was engaged in the unauthorised trafficking of confidential information to client dealers without the knowledge or consent of potential buyers. That was false. In its comparative statements, made through the mouth of an actor in the television and radio advertisements, and in the newspaper advertisement, the defendant conveyed that it was not in the business of providing contact details. That was misleading. The defendant’s business model, although different to that employed by the plaintiff, depended upon the transfer of contact information for its success.
I find that by making the representations through its advertising campaign, the defendant has engaged in conduct that is misleading or deceptive or likely to mislead or deceive the Australian public contrary to s 18 of the Australian Consumer Law.
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