Telstra Corporation Ltd v Singtel Optus Pty Ltd (No 2)
[2014] VSC 108
•31 MARCH 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 00498 of 2014
| TELSTRA CORPORATION LIMITED (ACN 051 775 556) | Plaintiff |
| v | |
| SINGTEL OPTUS PTY LTD (ACN 052 833 208) | Defendant |
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JUDGE: | ELLIOTT J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 20 MARCH 2014 | |
FURTHER EVIDENCE AND SUBMISSIONS: | 21, 24 MARCH 2014 | |
DATE OF JUDGMENT: | 31 MARCH 2014 | |
CASE MAY BE CITED AS: | TELSTRA CORPORATION LTD v SINGTEL OPTUS PTY LTD (No 2) | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 108 | |
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CONSUMER LAW – Misleading or deceptive conduct – False or misleading representations – Appropriate non-pecuniary relief – Declaratory relief – Corrective advertising – Various forms of corrective advertising - Competition and Consumer Act 2010 (Cth), s 138B, Sch 2, Australian Consumer Law, ss 18, 29(1)(b) and (g), 232.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Dr MJ Collins SC with Ms SA Burchell | King & Wood Mallesons |
| For the Defendant | Mr PJ Jopling QC with Mr E Gisonda | Minter Ellison |
TABLE OF CONTENTS
A. Introduction............................................................................................................................. 1
B. The relief sought by Telstra................................................................................................. 2
C. Key findings in the Principal Judgment............................................................................ 3
D. Further evidence..................................................................................................................... 5
D.1 Media coverage of this case on the issue of liability.................................................... 5
D.2 Newspaper advertisements by Telstra........................................................................... 6
D.3 New Optus advertisement............................................................................................... 7
D.4 Advertising in the mobile phone market....................................................................... 8
D.5 Information available to the public about Geographic Coverage of the Optus
network and the Telstra network.................................................................................... 9
D.6 Further evidence not before the court............................................................................. 9
E. Declaratory relief................................................................................................................... 10
F. Corrective advertising.......................................................................................................... 13
F.1 Orders sought.................................................................................................................... 13
F.2 Relevant principles........................................................................................................... 15
F.3 Corrective advertising should be ordered.................................................................... 17
F.4 Form of corrective advertising........................................................................................ 20
F.4.1 A letter to customers of Optus.................................................................................. 20
F.4.2 Newspapers................................................................................................................. 22
F.4.3 Websites of the Newspapers..................................................................................... 25
F.4.4 Point-of-sale advertising at Optus shops................................................................ 26
F.4.5 Advertising on the Optus Webpages...................................................................... 26
G. Conclusion............................................................................................................................ 28
HIS HONOUR:
A. Introduction
In a judgment delivered on 18 February 2014 (“the Principal Judgment”), the court found that the defendant, Singtel Optus Pty Ltd (“Optus”), had engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the Australian Consumer Law contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (“the Act”). By the same conduct, the court also found Optus had contravened s 29(1)(b) and (g) of the Australian Consumer Law. These findings were made by reason that Optus made the following representations in trade or commerce:
(1)The Optus mobile network and the Telstra mobile network cover 98.5% and 99.3% of the Australian land mass respectively (“the First Representation”).
(2)The Geographic Coverage[1] of the Telstra mobile network is less than 1% greater than the Geographic Coverage of the Optus mobile network (“the Second Representation”).
(3)The difference between the Geographic Coverage of the Telstra mobile network and that of the Optus mobile network is minimal and insignificant (“the Third Representation”).
(Collectively “the Representations”.)
[1]Geographic Coverage was defined in the Principal Judgment as being the extent that the land mass of Australia is reached by a signal: [5], fn 3.
The Representations were made by means of an advertisement that was broadcast on:
(1)Free-to-air television from approximately 26 January 2014 until 18 February 2014, a total of 24 days.[2]
(2)The internet from approximately 30 January 2014 until 7 February 2014, a total of 9 days,[3]
(“the Advertisement”).
The Advertisement was the subject of an extensive national advertising campaign.[4] A distinctive feature of this case is that Optus not only grossly overstated its own position in relation to Geographic Coverage, but it also materially overstated the position of its principal competitor, the plaintiff, Telstra Corporation Ltd (“Telstra”).
[2]At trial, the evidence was that the broadcasting on television commenced on approximately 29 January 2014. Further evidence filed by Optus after the trial was completed has corrected this date to 26 January 2014. See Principal Judgment [40], fn 33.
[3]The Advertisement was removed from Optus’ website by Optus voluntarily on 7 February 2014. The Advertisement remains on the internet at a limited number of archival websites.
[4]See Principal Judgment, [7]-[15], [40]-[41]. Further, it became apparent after the Principal Judgment was delivered that the Advertisement had been broadcast beyond the details of the evidence tendered at trial. See par 32 below.
As a result of the court’s findings, the following orders were made on 18 February 2014:
(1)Optus take all necessary steps forthwith to remove as soon as possible, but in any event by no later than midnight on 20 February 2014, from circulation or public view any advertisements or promotional material containing the First Representation, the Second Representation and/or the Third Representation.
(2)Optus, and its officers, employees and agents, be restrained from making, in trade or commerce, the Representations or any of them.
The matter was adjourned for a further directions hearing on 28 February 2014. On that day, by consent, orders were made for further evidence and submissions to be filed, with the listing of the proceeding for further hearing on 20 March 2014.
Telstra now seeks non-pecuniary relief. Telstra’s claim for damages remains outstanding. No submissions have been made to date on that aspect of the case.
B. The relief sought by Telstra
Essentially, Telstra seeks 2 forms of relief. First, it seeks declaratory relief specifying the conduct of Optus which was found to be misleading and a corrective statement. Secondly, Telstra seeks various forms of corrective advertising in order to dispel what it says is the incorrect or false impression which has created an ongoing misapprehension amongst the target audience to which the Advertisement was directed. The corrective advertising sought does not include television advertising.[5]
[5]Cf Medical Benefits Fund of Australia Ltd v Cassidy (2003) 135 FCR 1, 23-24 [60]-[61], 24 [63] (Stone J, with whom Moore and Mansfield JJ relevantly agreed).
Optus does not oppose the declarations being made in the form proferred by Telstra. Optus otherwise opposes the non-pecuniary relief sought.
C. Key findings in the Principal Judgment
Telstra relies upon the Principal Judgment generally in submitting the relief now sought is appropriate. That said, particular emphasis was placed upon the following:[6]
[6]Principal Judgment, [20], [22]-[24], [46], [53], [62]-[63], [93]-[94].
Telstra identified the target audience or class of persons to whom the Advertisement is directed as members of the Australian public who are considering acquiring a mobile telephone service or considering changing the carrier who supplies the existing service (“the Class”). Optus took no issue with this approach. It is plain the persons to whom the Advertisement is directed would include at least those persons referred to by Telstra. I will proceed on this basis.[7] Self-evidently, given the prevalence of mobile telephone users in the community, the Class would cover a large cross-section of the Australian population.[8]
[7]Cf Australian Competition and Consumer Commission v SMS Global Pty Ltd [2011] FCA 855, [15]-[16] (Murphy J); Australian Competition and Consumer Commission v Telstra Corporation Ltd (2007) 244 ALR 470, 476 [23] (Gordon J); Telstra Corporation Ltd v Cable & Wireless Optus Ltd [2001] FCA 1238, [22] (Ryan J).
[8]A similar observation was made in Australian Competition and Consumer Commission v Telstra Corporation Ltd (2007) 244 ALR 470, 476 [23].
…
Telstra led unchallenged evidence that Telstra has no way of knowing why any of its customers “switch” to another provider, such as Optus. This evidence included the fact that it is very difficult to assess the effect particular advertisements have on consumer behaviour.
The relevant market is dominated by post-paid, fixed term contracts, often 12 or 24 months in duration. Approximately 75 per cent of Telstra’s mobile telephone users in Australia are contracted to Telstra in this way. As a result of these arrangements, including additional payments a customer must make if she or he terminates the contract before the expiry of the fixed term, customers intending to change providers often wait until the end of a contract before switching. This is one of the factors which makes it difficult to assess why a customer leaves a provider.
One matter Telstra is able to establish is that coverage is an important consideration for a customer when she or he is deciding which provider to engage. The evidence, again uncontested and based on market research conducted from July to September 2013, demonstrates that the most important factor in customers deciding to switch to Telstra from another network was the network coverage of Telstra. Of those surveyed, 71 per cent gave this factor as the reason for changing. Although not as significant, network coverage was also an important factor for first-time customers and existing customers of Telstra.[9]
[9]For completeness, I note that the materials tendered do not indicate what, if any, definition of “coverage” was used in conducting the survey.
…
On each of these occasions [when reference is made to “98.5%”, “99.3%” and “LESS THAN 1%” in the Advertisement], and when viewed collectively, taking into account the contents of the Advertisement as a whole, the dominant message conveyed is that the figures of 98.5 per cent and 99.3 per cent have a relationship with coverage concerning the width and breadth of Australia, within the boundaries of Australia as depicted on the Map.
…
In short, I accept the submission made on behalf of Telstra that these aspects of the Advertisement [namely, the absence of any reference in the images displayed to Population Coverage, the failure to refer to the true position in relation to Geographic Coverage, and the use of a map of Australia when conveying the figures] were part of a deliberate advertising strategy that was calculated to benefit Optus’ business.[10] In these circumstances, the authorities[11] establish that it may properly and more readily be inferred that the Advertisement has the effect intended.
[10]Cf Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 304 ALR 186, 198 [55] (French CJ, Crennan, Bell and Keane JJ). See Principal Judgment, [33].
[11]Ibid, and the cases there cited.
…
In relation to the First Representation and the Second Representation, the figures of 99.3 per cent in relation to Telstra and 98.5 per cent in relation to Optus bear no resemblance to the actual Geographic Coverage of the respective networks. Moreover, the difference in Geographic Coverage between the 2 networks is far greater than 1 per cent. As may be seen in paragraph 37 [of the Principal Judgment], Telstra’s mobile network covers an area nearly 2½ times greater in land mass than the mobile network of Optus.
In relation to the Third Representation, the difference between the Geographic Coverage of the 2 networks is not minimal and insignificant. By reason of the substantial difference in the Geographic Coverage, the Third Representation, as found above, is plainly misleading or deceptive.
…
It is correct to contend that the Advertisement has a number of components. But it is irrefutable that a key component of the Advertisement is the focus upon the Geographic Coverage of the Optus mobile network and the comparison with the Telstra mobile network. This aspect of the Advertisement provides the platform upon which Optus seeks to make it attractive to “switch” and enter into the deals that are being offered.
Although the deals might be very attractive commercially (there was no evidence about this), and accordingly might attract considerable attention, in my view that possibility does not detract from the dominant message of the Advertisement.
Telstra relies upon these passages in submitting, correctly in my view, that the contraventions were not “technical or de minimis”, but were significant contraventions.
D. Further evidence
Optus tendered a large amount of additional evidence. This evidence principally related to the media coverage given to the outcome of this case on liability, and the advertising conducted by Telstra and Optus relevant to their respective mobile networks. There was also further evidence led concerning the extent of mobile telephone advertising, and other evidence regarding information available about the mobile telephone networks, including Geographic Coverage.
D.1 Media coverage of this case on the issue of liability
Dealing first with newspaper publications, Telstra first approached the court on 7 February 2014 seeking interlocutory relief restraining Optus from any further broadcast of the Advertisement.[12] On the following day, newspaper articles appeared in a national newspaper, The Weekend Australian, and 2 Melbourne based newspapers, the Herald Sun and The Saturday Age. On 13 February 2014 (ie the day after the hearing on liability), The Sydney Morning Herald published a further article. The article was very brief and noted that judgment had been reserved. Essentially, those articles recorded, cursorily, the respective positions of the parties. None of the articles set out the Representations in full.
[12]See Principal Judgment, [2].
Upon the Principal Judgment being delivered, newspaper articles appeared the following day in 2 national newspapers (The Australian and The Financial Review) and 1 Melbourne based newspaper (the Herald Sun). None of the articles were prominently placed and the 2 national publications were very brief. To summarise, the case was reported in only a very small number of the newspapers circulated throughout Australia.
In relation to websites, at and after the time of the interlocutory application, 26 separate articles appeared at various webpages on the internet. Some of those webpages were related to newspapers. In summary, most of the articles were relatively superficial on the issues at hand, though a relatively small number of the articles were quite detailed. The extent to which these articles were opened by internet users is not the subject of any evidence.
Shortly after the Principal Judgment was delivered, 21 further articles appeared on webpages on the internet. Those articles, broadly speaking, recorded the outcome of the trial on liability. Again, the extent of the articles ranged from brief and superficial to quite extensive details of the Principal Judgment.
Importantly, none of the publications referred to in paragraph 13 above made reference to the percentage of Australia’s land mass covered by Optus and only 3 of them referred to the percentage of the land mass covered by the Telstra mobile network. Each of these 3 articles referred to Telstra’s network reaching 2.3 million square kilometres of Australia, representing approximately 28 per cent of the land mass. That information appeared on the websites with the domain names ITnews.com.au, ITwire.com and TheAustralian.com.au. Again, the extent to which these articles were opened by internet users is not the subject of any evidence. Further, the court has no information on how frequently websites such as these are visited by the public generally.
Finally, there was also publication of the result on a Geelong radio station shortly after the Principal Judgment was delivered. The evidence before the court does not disclose what was actually broadcast.
D.2 Newspaper advertisements by Telstra
On the weekend before the Principal Judgment was delivered, Telstra placed a full page and colour advertisement in The Weekend Australian. It was located in a prominent position, namely page 7. This advertisement was also published on page 6 of The Sunday Age on 16 February 2014.
This advertisement dealt specifically with the Geographic Coverage of both Telstra’s and Optus’ mobile networks. The advertisement, which contained a map of Australia and figures referable to Geographic Coverage superimposed on the map, included the following statements:
Other mobile companies may claim there’s no real difference between our network and theirs. But when you use your phone, the difference becomes all too real. Let’s look at the facts.
·Telstra covers over 2.3 million sq km of Australia. Our competitors have said they cover more than 1 million sq km*. On those figures, that’s a difference of around 1.3 million sq km.
·We provide coverage to over 600 Australian towns and communities, 7,500 km of highways and 4,500 km of railways not covered by other mobile networks.
…
We mean 1.3 million square kilometres more.
…
*Source reference: 21 November 2013 on optus.com
It is relevant to focus not only on what the advertisement said, but also on what was not referred to. There was no reference in this advertisement to Population Coverage.[13] Further, and more significantly for present purposes, there was nothing conveyed in relation to the percentage of the Australian land mass that was covered by either network. It was not suggested to the court by either party that an ordinary or reasonable person in the Class[14] would be likely to know the proportion of the Australian land mass represented by 2.3 million or 1 million square kilometres.
D.3 New Optus advertisement
[13]Population Coverage was defined in the Principal Judgment as being a reference to the number of people within Australia who can be reached by a signal where they reside or are usually located, thereby allowing them to use the mobile network. See also Principal Judgment, [5], fn 3.
[14]For the meaning of “the Class” see the Principal Judgment at [20] and par 8 above.
Optus has now placed a new advertisement to be broadcast extensively in the same locations previously used to broadcast the Advertisement (“the New Advertisement”). The New Advertisement has also been placed on the Optus website. In contrast to the Advertisement, the New Advertisement expressly refers in its graphics to “Australia’s Population” when referring to the coverage of 98.5 per cent and 99.3 per cent. Further, the voiceover now refers to “the percentage of Australia’s population the Optus mobile network reaches” (emphasis added), thereby making it clear that the figures represented relate to Population Coverage rather than Geographic Coverage. Furthermore, the New Advertisement does not include a map of Australia.
The first part of the New Advertisement dealing with Population Coverage goes for a period of 12 seconds. This is the same amount of time that the Advertisement addressed (what the court found to be) Geographic Coverage. Like the Advertisement, the New Advertisement then has a further 18 seconds of air time that deals with a Samsung handset offer (though this is now for only 1 handset rather than 2).
The New Advertisement is to be broadcast from 7 March 2014 to 12 April 2014, screening 1,378 times across 77 television channels in 11 cities and regions.
The New Advertisement says nothing regarding the Geographic Coverage of Optus’ mobile network or Telstra’s mobile network. It does not correct the inaccuracies in the Representations.
D.4 Advertising in the mobile phone market
Optus led evidence of 75 advertisements, in addition to the Advertisement, concerning the mobile phone market in Australia for the period from 26 January 2014 to 7 March 2014.
The actual advertisements were not put in evidence, but rather their titles, together with the date upon which they were first published or broadcast, were given. Further to this list, Optus tendered, without objection, a report by a company that monitors press, online, radio, television and outdoor advertising in Australia for mobile phones and related services. That report was broken into a number of sections dealing with each of the categories referred to in the preceding sentence. I do not propose to go through this considerable amount of material in any great detail. In short, the report provides a brief summary of each advertisement, together with a pictorial (which comprises the advertisement itself in relation to press advertisements), and a script in relation to radio advertising.
The material shows there is a substantial amount of advertising in the mobile phone market for various products and packages. Optus submitted the “ongoing clamour” of advertising in this area of the market means the effect of the Advertisement is likely to have been diminished.[15]
D.5Information available to the public about Geographic Coverage of the Optus network and the Telstra network
[15]Cf Luxottica Retail Australia Pty Ltd v Specsavers Pty Ltd (No 2) [2010] FCA 644, [8(d)] (Perram J). See also Trade Practices Commission v Telstra Corporation Ltd (1993) ATPR 41-256, 41,458.1 col 2 (Hill J).
Optus also led evidence about the ability of a person interested in Geographic Coverage of either network to obtain that information on the internet. The evidence indicated that it was a relatively straightforward exercise to look up the actual Geographic Coverage in relation to each of the networks.
There was no evidence of the extent to which members of the Australian public made such inquiries, whether before entering into a mobile phone contract or otherwise. Accordingly, there is no proper basis for the court to assume consumers would seek to verify the accuracy of the Representations before making any decision about which mobile network to choose. Indeed, in the absence of any evidence, such an assumption may not sit comfortably with the previous finding of the court that an “ordinary or reasonable person in the Class would expect Optus to be able to give an accurate account of the Geographic Coverage that it [and Telstra] possessed”.[16]
D.6 Further evidence not before the court
[16]Principal Judgment, [74].
There is no evidence before the court as to how many customers have signed up to a mobile phone contract with Optus since the Advertisement was first broadcast. Accordingly, the court has no means of estimating, or even approximating, the extent that the large cross-section of the Australian population to whom the Advertisement was directed, namely the Class, may have been affected by the Advertisement and also have entered into a contract.
Further, Optus has chosen to lead no evidence on how many occasions the Advertisement was broadcast. Accordingly, there is no specific evidence upon which the court could seek to accurately assess the level of penetration of the Advertisement into the market place. It follows that comprehensive evidence directly relevant to whether or not consumers currently labour under a misapprehension as to Geographic Coverage has not been put before the court.
Optus provided no explanation as to why such evidence has not been led. In those circumstances, I will assume that such evidence would not have assisted Optus in relation to this aspect of the case.[17] Further, given the nature of the evidence, there can be no doubt that Optus had the ability to provide more detailed and complete evidence, but has failed to take the opportunity to do so.[18]
[17]Jones v Dunkel (1959) 101 CLR 298, 308.5 (Kitto J), 312.6 (Menzies J), 320.8-321.2 (Windeyer J).
[18]Blatch v Archer (1774) 1 Cowp 63, 65 [98 ER 969, 970.2]. For more recent decisions in this regard, see Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345, 412-413 [165]-[167] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ), 441-442 [250] (Heydon J) and the cases there cited.
As stated in the Principal Judgment, the evidence (which was tendered by Telstra) is that the Advertisement was broadcast on in excess of 50 free-to-air television channels in Brisbane, Perth, Sydney, Adelaide and Melbourne and that up to 7 February 2014 the Advertisement had been broadcast at least 133 times on free-to-air television.
On the day that judgment was delivered, senior counsel for Optus indicated there had been further advertising to areas beyond that indicated in the evidence then before the court. A further affidavit filed by Optus on 21 March 2014 confirms that the Advertisement was also broadcast in Maryborough, Queensland; in Newcastle and Wollongong, New South Wales; Ballarat, Victoria; and Tasmania. No further evidence has been given beyond specifying these additional locations.
E. Declaratory relief
Although the declarations sought by Telstra are not opposed, it is still a matter for the court as to whether or not it is appropriate for the declarations to be made.[19]
[19]Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, 581.9-582.3 (Mason CJ, Dawson, Toohey and Gaudron JJ), 595.10-596.7 (Brennan J); Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421, 437.9-438.3 (Gibbs J, with whom McTiernan, Stephen and Mason JJ agreed).
Declarations are sought by Telstra in the following form:
Over the period from about 26 January 2014 to about 19 February 2014, Optus in trade or commerce:
(a)engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of section 18 of the Australian Consumer Law contained in schedule 2 of the Competition and Consumer Act 2010 (Cth) (“Australian Consumer Law”);
(b)in connexion with the promotion of the supply of services, falsely represented that services are of a particular standard, quality, value or grade in contravention of section 29(1)(b) of the Australian Consumer Law; and
(c)in connexion with the promotion of the supply of services, falsely represented that services have performance characteristics, uses or benefits they do not have in contravention of section 29(1)(g) of the Australian Consumer Law,
by causing to be broadcast and otherwise published the advertisement referred to in paragraph 5 of the amended statement of claim, and thereby falsely representing that:
(d)the Optus mobile network and the Telstra mobile network cover 98.5 per cent and 99.3 per cent of the Australian land mass respectively, when in fact the Optus mobile network covers about 1 million square kilometres, and the Telstra mobile network covers more than 2.3 million square kilometres, of the Australian land mass;
(e)the geographic coverage of the Telstra mobile network is less than 1 per cent greater than the geographic coverage of the Optus mobile network, when in fact the geographic coverage of the Telstra mobile network is significantly greater than the geographic coverage of the Optus mobile network; and
(f)the difference between the geographic coverage of the Telstra mobile network and that of the Optus mobile network is minimal and insignificant, when in fact the differences are material and substantial.
There are numerous cases dealing with the appropriateness of granting declaratory relief where a corporation has engaged in misleading advertising.[20] There was no issue between the parties as to the applicable principles. The court has a wide discretion. The position in relation to the making of declarations generally was encapsulated by the plurality in Ainsworth v Criminal Justice Commission:[21]
It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which “[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise.” However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have “a real interest” and relief will not be granted if the question “is purely hypothetical”, if relief is “claimed in relation to circumstances that [have] not occurred and might never happen” or if “the Court’s declaration will produce no foreseeable consequences for the parties”.
(Citations omitted.)
[20]For example, Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2) (2012) ATPR 42-402 (Murphy J); Seafolly Pty Ltd v Madden (2012) 297 ALR 337 (Tracey J); Australian Competition and Consumer Commission v SMS Global Pty Ltd [2011] FCA 855 (Murphy J); Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) (2011) 195 FCR 1 (Gordon J).
[21](1992) 175 CLR 564, 581.9-582.3 (Mason CJ, Dawson, Toohey and Gaudron JJ). See also 595.10-596.7 (Brennan J).
In this case there has been a real controversy. The claims made by Telstra have been strenuously opposed.[22] In my view, it is appropriate that declarations be made in circumstances where the court has found that Optus has deliberately engaged in conduct that significantly contravened the Australian Consumer Law for a material period of time. The declarations will clearly identify the contravening conduct, will publicise the type of advertising that constitutes a contravention and provide a warning to business not to engage in misleading or deceptive conduct, or make false or misleading representations.[23] In particular, the declaratory relief will aid in consumers being protected from making ill-informed decisions concerning long-term contracts for mobile phone plans.
[22]See also Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd [2009] FCA 960, [8]-[18] (Finkelstein J) and the cases there cited.
[23]Cf Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2) (2012) ATPR 42-402, 45,585 col 2-45,586 col 1 [14] (Murphy J).
As already noted, the misleading conduct involved a comparative advertisement being published, containing Representations misrepresenting not only the Geographic Coverage of Optus, at 98.5 per cent (rather than the factual position of approximately 12.6 per cent[24]), but also misrepresenting Telstra’s Geographic Coverage at 99.3 per cent (rather than the actual coverage of approximately 30.6 per cent[25]). In short, given the misinformation that has been disseminated, there is a public interest in members of the Class being properly informed as to the Geographic Coverage of both mobile networks. The making of appropriate declarations will assist in achieving this outcome.
[24]Principal Judgment, [37], fn 32.
[25]Ibid.
Accordingly, despite the fact that the declarations as sought by Telstra were not opposed, I am not willing to make declarations in the form sought. Notwithstanding Telstra’s submissions to the contrary, it is important that the relevant corrective statement contained in the declarations also addresses the issue of Geographic Coverage in percentage terms. Thus, the court will make declarations which make it clear what the true position is, both in terms of square kilometres of Geographic Coverage and also the proportion of the Australian land mass that is covered by the respective networks.[26] Anything less than this may allow a misleading message or impression to remain.
F. Corrective advertising
F.1 Orders sought
[26]See par 88 below.
There was no issue that the court has power to order corrective advertising in appropriate circumstances.[27] Telstra sought the following corrective conduct be ordered to be performed by Optus:
[27]The Act, s 138B(1); Australian Consumer Law, s 232. For an early decision on this point, see Janssen Pharmaceutical Pty Ltd v Pfizer Pty Ltd (1985) 6 IPR 227, 237.9-238.4 (Burchett J).
(1)Optus forward by ordinary pre-paid post a letter to all customers of Optus who entered into a post-paid mobile plan with Optus[28] between 26 January 2014 (being the earliest date the Advertisement may have been broadcast) and the date of the order of the court on this aspect of the case.
[28]See Principal Judgment, [23].
(2)Optus cause an advertisement to be published on Wednesday and Saturday during 1 week commencing within 7 days of the court’s order in each of The Australian, The Daily Telegraph, The Sydney Morning Herald, The Age, the Herald Sun, The Advertiser, The Courier Mail, The West Australian, The Mercury, The Canberra Times and the Northern Territory News, as well as any other newspaper being a newspaper which has the highest circulation in an area of Australia in which the Advertisement was broadcast (collectively, “the Newspapers”), and for Optus to take the necessary steps to ensure the advertisement is in a prescribed size and type,[29] and within the first 10 pages of the Newspapers.
[29]Telstra specified a size of no less than 16cm by 20cm for a newspaper in tabloid form and a size of no less than 22cm by 30cm for a newspaper in broadcast form, with a text in type of no less than size 12 font in both cases.
(3)Optus cause to be published on the websites of the Newspapers an advertisement stating “A correction from Optus regarding coverage of the Telstra and Optus mobile networks” containing a link to the full terms of a notice in terms specified, ensuring that:
(a)the advertisement contains only the wording and the link referred to;
(b)if a person clicks on the link, that person will be taken only to the notice; and
(c) the advertisement is maintained on each website for 7 days.
(4)Optus cause to be published by prominent signage which is clearly visible to customers at all Optus shops (including licensed dealerships and agencies) a notice in terms specified and of a size of no less than A1 format, such notice to remain in place for 30 days.
(5)Optus cause to be published on 5 separate pages of the Optus website a notice in terms specified in no less than size 12 font, ensuring that such notice:
(a)appears immediately upon access by a person to the home page of any such website;
(b)appears in an automatically generated pop-up window or message box whereby a member of the public is required to close the window or message box in order for it to disappear from the screen; and
(c) is maintained on the website for 30 days.
The addresses to the 5 webpages referred to in paragraph 39(5) above were provided by Telstra, namely:
(1) (“the Home Page”).
(2) (“the Mobile Phones Page”).
(3) (“the Pre-paid Mobile Page”).
(4) (“the My Plan Page”).
(5) (“the Network Mobile Coverage Page”).
(Collectively “the Optus Webpages”.)
F.2 Relevant principles
The authorities make it plain there is no presumption that corrective advertising will be ordered if the public, or a section of the public, has been misled. Each case depends on its circumstances. A number of the relevant authorities on the issue of corrective advertising are referred to in the judgment of Stone J as a member of the Full Court of the Federal Court of Australia in Medical Benefits Fund of Australia Ltd v Cassidy.[30] From the authorities referred to by her Honour, the following propositions may be stated:
(1)The power to order corrective advertising is to be used protectively and not punitively.[31]
(2)The purpose of corrective advertising is to dispel incorrect or false impressions that may have been created as a result of misleading or deceptive conduct.[32]
(3)There is no period of time beyond which it is inappropriate to order corrective advertising. In determining the utility of any corrective advertising, the lapse of time is a relevant consideration, the significance of which will depend on the facts of the case.[33]
(4)In assessing whether or not corrective advertising is warranted, “the nature, extent and intensity of the advertising and the media in which it has been released” must be examined with a view to deciding whether there could reasonably be any current misapprehension as a result of the advertisement.[34]
[30](2003) 135 FCR 1 (with whom Moore and Mansfield JJ relevantly agreed).
[31]At 20 [48]-[49].
[32]At 20-21 [49]-[50].
[33]At 20-21 [49], 23 [58].
[34]At 20-21 [49], quoting Australian Competition and Consumer Commission v On Clinic Australia Pty Ltd(1996) 35 IPR 635, 640.8 (Tamberlin J).
One of the purposes of corrective advertising is to educate the public, both consumers and competitors, as to the type of conduct that may contravene the Act. It is important that corrective advertising does more than merely announce the outcome of a particular case.[35]
[35]At 21 [50]-[52]; citing Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd (No 2) [2002] FCA 1548, [22] (French J); Australian Competition and Consumer Commission v Target Australia Pty Ltd (2001) ATPR 41-840, 43,382 col 2 [21] (Lee J); Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 95 FCR 114, 133.5 (French J).
In the Principal Judgment,[36] a passage was quoted concerning the level of attention ordinarily given to television commercials by the ordinary or reasonable viewer.[37] The passage quoted continued by stating that the frequently low attention afforded to television commercials “is relevant not only to gauging the impact of the initial advertisement but also to the capacity of corrective advertising – with its complex message – to operate effectively”.[38]
F.3 Corrective advertising should be ordered
[36]At [32].
[37]Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 3) (2010) 276 ALR 102, 105 [7] (Perram J).
[38]Ibid.
For the reasons already stated concerning the appropriateness of declaratory relief,[39] there is a need for corrective advertising to occur. To expand on what is stated above, it is highly likely there is a current misapprehension amongst members of the Class in relation to the proportion of the Australian land mass that is covered by the mobile telephone networks of each of Telstra and Optus. The fact that there is no direct evidence to establish that persons in the Class have actually been misled is no bar to corrective advertising being ordered.[40]
[39]See par 36 above.
[40]See, for example, Australian Competition and Consumer Commission v TPG Internet (No 2) (2012) ATPR 42-402 (Murphy J); Australian Competition and Consumer Commission v Willesee Healthcare Pty Ltd (No 2) [2011] FCA 752 (Dodds-Streeton J); Easyway Australia Pty Ltd v Infinite Plus Pty Ltd [2011] FCA 351 (Foster J); Aldi Stores (A limited partnership) v EFTPOS Payments Australia Ltd (2011) ATPR 42-371 (Jacobson J).
The likelihood of a misapprehension must be assessed in the context not only of the contents of the Advertisement, but also all relevant surrounding circumstances. One such circumstance is the fact that, in the extensive promotional material of both Telstra and Optus that is before the court, each company has refrained from informing the Australian public as to the percentage of Geographic Coverage of their respective networks. In contrast to Population Coverage, where both corporations are willing to strongly and widely publicise the extent of their coverage in terms of percentages of the total population, both Telstra and Optus, generally speaking, promote Geographic Coverage by reference to square kilometres without any reference to the proportion of the Australian land mass that those areas represent.[41]
[41]By making these observations, no criticism is being made of either Telstra or Optus. There was no issue at trial, and the court has not considered, whether the approach both corporations take of representing Population Coverage in percentage terms and Geographic Coverage in square kilometres is in any way misleading.
Given that Optus has falsely represented that the Geographic Coverage of both Telstra and Optus is nearly at 100 per cent, and that this bears no resemblance to the true position (see paragraph 37 above), it is important that corrective advertising occur in each form of media used by both corporations promoting their Geographic Coverage and Population Coverage. This should have the effect of advancing the protection of members of the Class who have, or might in the future, enter into a long term post-paid mobile phone contract.
Collectively, Telstra and Optus have promoted both Population Coverage and Geographic Coverage in newspapers, on the internet and on free-to-air television. With the exception of television broadcasting,[42] it is appropriate that corrective advertising reach these means of publication.
[42]See par 6 above.
In opposing any form of corrective advertising, Optus submitted that the effluxion of time meant that corrective advertising was not necessary. Optus relied upon the fact that, at the time of this hearing on non-pecuniary relief, the Advertisement had not been broadcast on television for 30 days, and on the internet generally for 41 days.
This judgment will be delivered less than 6 weeks after the Advertisement ceased being broadcast (most of the lapse of time being by consent between the parties in order that further evidence and submissions could be put before the court). By comparison to other cases in which corrective advertising has been ordered, the delay is relatively insignificant.[43] Certainly, given the nature, extent and intensity of the advertising in question,[44] the length of time, of itself, does not suggest that the misapprehension created by the Advertisement would have now lapsed.
[43]For example, see Australian Competition and Consumer Commission v Willesee Healthcare Pty Ltd [2011] FCA 301 (corrective advertising ordered 11 months after misleading conduct ceased); Easyway Australia Pty Ltd v Infinite Plus Pty Ltd [2011] FCA 351 (corrective advertising ordered 8 months after misleading conduct ceased); Specsavers v Optical Superstore Pty Ltd (2010) 276 ALR 569 (corrective advertising ordered 9 months after misleading conduct ceased); Australian Competition and Consumer Commission v Prouds Jewellers Pty Ltd (No 2) (2008) ATPR 42-230 (corrective advertising ordered 2 years after misleading conduct ceased); Cassidy v Medical Benefits Fund of Australia Ltd (2003) 12 ANZ Ins Cas 61-549 (corrective advertising ordered at first instance 2 years after misleading conduct ceased), and, on appeal, Medical Benefits Fund of Australia Ltd v Cassidy (2003) 135 FCR 1 (alternative corrective advertising ordered 3 years after misleading conduct ceased).
[44]To the extent that the court is aware, given Optus’ approach to tendering evidence on the relevant matters: see pars 28-32 above.
I also do not accept that the transient nature of television advertising means that members of the Class are not likely to recall the relevant information concerning Geographic Coverage. The dominant message of the Advertisement was clearly and strongly communicated. Further, unlike, for example, prices or terms of contract that may change frequently, the relevant figures are not likely to be understood to be the subject of any significant change, especially when such figures are at nearly 100 per cent. These facts, coupled with the evidence before the court that Geographic Coverage was the most important factor as a reason for customers choosing the Telstra network, demonstrate that it is a material, and perhaps determinative, factor in a member of the Class choosing a mobile network. In other words, it is a factor to which members of the Class were likely to give some attention and focus.
As for Optus’ submission that the publicity already afforded to this case means corrective advertising is unnecessary, this contention has little merit. Although the case has received some media attention,[45] it is not at a level that the court could expect it has come to the attention of most of the members of the Class. In addition, the message to be clearly conveyed in the corrective advertising has not been previously published in such a manner.[46] In short, the court is not satisfied that the likely ongoing misapprehension the result of the Advertisement would have been corrected by the publicity this case has received.
[45]See pars 10-15 above.
[46]The position in this case may be contrasted with Australian Competition and Consumer Commission v Telstra Corporation Ltd (2007) ATPR 42-207. In that case, Gordon J declined to order corrective advertising in circumstances where a trade rival of the respondent had taken out full page advertisements in major newspapers recording the actual findings that the Federal Court of Australia had made. Further, the Federal Court was not provided with any explanation as to why any orders would be of utility in achieving any of the usual purposes of corrective advertising. Finally, unlike this case, there was no ongoing conduct and representations on the subject matter of the misleading representations: see 48,429 col 1 [5].
The further matters raised by Optus to oppose the corrective advertising do not provide a basis for not making orders to rectify the situation. As already noted,[47] the New Advertisement does not address the issue of Geographic Coverage at all. Further, the fact that there may be a lot of other commercials about mobile phones is not to the point. Those commercials are largely not concerned with the discrete, and important, issue of Geographic Coverage.
[47]See par 22 above.
For completeness, I agree with Optus’ submission that the publication of corrective advertising has the potential to complicate any assessment of any damage suffered by Telstra.[48] However, this possibility does not provide a compelling reason not to order corrective advertising if the circumstances otherwise warrant that it be ordered to protect consumers.
F.4 Form of corrective advertising
[48]Cf The South Australian Brewing Co Pty Ltd v Carlton & United Breweries Ltd [2001] FCA 994, [9] (Mansfield J).
Before considering the media in which both Telstra and Optus have been and are continuing to be actively engaged, it is convenient to consider the appropriateness of a letter being sent to relevant Optus customers.
F.4.1 A letter to customers of Optus
Telstra proffered a letter that it submitted ought to be sent to all relevant customers of Optus. Although Optus opposed any order requiring the letter to be sent,[49] it proffered an alternate letter for consideration by the court.
[49]In Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 3) (2010) 276 ALR 102, 109 [23], Optus accepted Optus should inform all persons who had acquired plans during the relevant period of the deception in that case of the position as found by the court. There was no explanation by Optus as to why such a position was not adopted in this case.
On the facts as found, there must be a real risk[50] that members of the Class who have entered into a post-paid mobile plan with Optus have done so in reasonable reliance upon a belief that the Geographic Coverage of Optus was 98.5 per cent of the Australian land mass, and in any event that Optus had a Geographic Coverage that was minimally and insignificantly different to the Geographic Coverage of the Telstra mobile network. Such persons ought to be informed of the true position in relation to Geographic Coverage, and also ought to be able to cancel any contract entered into with Optus if reliance has been placed upon any of the Representations. The contracts entered into are ordinarily for a lengthy period of time, usually for 12 or 24 months, and the sums involved are not insignificant.[51]
[50]Both Telstra and Optus submitted the question for the court was whether there was a “real risk” (in the sense of not being a fanciful risk) of a current misapprehension and the Representations being relied upon. In my view, the risk in this case is substantial.
[51]In relation to the Advertisement, the 2 plans on offer were for 24 months, at a minimum cost of $35 per month and $40 per month, with the possibility of cancellation fees.
The form of letter to be sent should be in accordance with annexure 1 to this judgment. That letter states matters consistent with some of the submissions made by Telstra, together with some of the submissions made by Optus. I have decided on the contents of the letter in accordance with annexure 1 for the following reasons:
(1) The decision of the court is recorded.
(2)Those persons who believe they were affected by the Representations, and as a result have entered into a post-paid plan with Optus, will be given a choice as to whether or not to continue with Optus.
(3)The letter gives the relevant customers of Optus a reasonable period of time in which to make a decision about whether or not to cancel any plan entered into.
(4)The letter clearly states the true position in relation to the Geographic Coverage of both networks, not only in relation to the square kilometres covered, but also in percentage terms. This allows the reader to understand the extent to which the Representations concerning the percentage of Geographic Coverage were false, misleading or deceptive.
(5)The letter makes it plain there is a material and substantial difference in the Geographic Coverage of the 2 mobile networks.
(6)The letter also makes it plain that there is only a minimal difference in the extent to which the mobile networks reach the Australian population.[52]
[52]This is also important information to provide to members of the Class. This is particularly so in the context where there is further advertising in this regard, which is ongoing, so that the Class will not think that such representations may also be misleading or deceptive.
I do not accept the submission made by Optus that the proposed letter should only be sent to customers who entered into a post-paid plan involving a Samsung handset. Although the Advertisement was only concerned with Samsung handsets, the Representations were directed to Geographic Coverage in relation to all types of handsets, whether sold by Optus or otherwise purchased by the consumer. In my view, there is no proper or logical reason why a person who relied upon the Representations and entered into a post-paid plan with Optus using a handset other than a Samsung ought to not also be informed of the true position, and have commensurate rights to cancel any plan that has been entered into.
Finally, it is necessary to determine for what period of time the letter ought to be sent. Naturally, the letter should be sent promptly. Telstra suggested it should be sent within 7 days[53] and Optus did not suggest the letter could not be sent in this timeframe. The court will order accordingly. Although Telstra only sought the letter to be sent to customers who entered into a plan with Optus up until the date of the court order, it is my view that the letter needs to be sent for a slightly longer period of time. As I have stated, corrective advertising will be ordered as there is a real risk that the misapprehension created by the Representations is continuing. I can see no good reason why a customer of Optus who enters into a plan on or after the date of the court order, but before having the benefit of the corrective advertising, should not be able to receive a letter and be informed of the true position.[54]
[53]See annexure 3.
[54]Of course, this means that some persons might receive a letter notwithstanding they have already seen the corrective advertising. However, given the contents of the penultimate paragraph of the letter, under the heading “What to do”, such persons will not be likely to be able to form the requisite belief to entitle them to cancel their plans.
Accordingly, I will order that the letter be sent to all customers who entered into a post-paid plan with Optus from 26 January 2014 up to and including 14 days after the completion of the corrective advertising, namely 16 May 2014.[55]
F.4.2 Newspapers
[55]See annexure 3.
Just as there is a real risk that members of the Class who have entered post-paid mobile plans with Optus have been misled, there is also a real risk that those in the Class beyond such existing Optus customers may rely on the Representations in the future in determining whether to enter into a mobile plan. This position is amplified by the long term nature of the contracts that are prevalent in this area of commerce.[56] This factor may result in delay in a member of the Class acting upon the Representations. Further, the uncontested evidence is that it is not possible to identify which persons in the Class may fall into this category.
[56]See Principal Judgment, [23].
In my opinion, these circumstances mean that direct mailing of letters is insufficient to put in place an appropriate corrective regime. Dissemination beyond Optus’ existing customers needs to be conveyed by more general means. One of those means should be publication in newspapers.
Both Telstra and Optus made submissions concerning the circulation of newspapers and their reduced impact given the penetration of other forms of media today. Senior counsel for Optus submitted that the “reality is the newspaper world has disappeared”. Whilst senior counsel for Telstra did not put it in such dramatic terms, it was also submitted that it was notorious that print media is in decline.
Optus submitted, given the diminished impact of newspapers in Australia, it was not appropriate to require corrective advertising by this form of media. I do not accept this submission made on behalf of Optus. There are 2 reasons for this.
First, corporations engaging in trade or commerce in Australia today still repeatedly place substantial advertisements in newspapers. It must follow that there is still a considered view that such advertising has some material effectiveness.
Secondly, Telstra itself apparently holds this view in relation to the effectiveness of this form of advertising. Indeed, Telstra chose this form of advertising to state its position on the very subject matter of this proceeding, namely Geographic Coverage. This was done when the Advertisement was the subject of ongoing broadcasting and the matter was set down for trial.[57]
[57]See par 16 above.
Given this form of publication has been used in the recent past specifically to inform members of the Class as to Geographic Coverage of the 2 networks, it is my view that this provides an additional basis for deciding that corrective advertising should also be published by this means. This is particularly so when, as observed above, the advertisement placed by Telstra made no reference to percentages of Geographic Coverage, and placed the information conveyed concerning square kilometres within a map of Australia. In short, the advertisement is not corrective of the dominant message conveyed in the Advertisement.
As to the extent of publication, I can see no reason for limiting it to The Australian (as was submitted by Optus). The most practical course is for publication in The Australian (being a national publication), together with the other Newspapers in all of the capital cities,[58] plus the regions in which the Advertisement was broadcast (as per paragraph 39(2) above). I will invite the parties to agree promptly on the list of publications that meets this description as I do not have a complete record of such matters.
[58]Optus submitted the corrective advertising should be confined to the capital cities in which the advertisement was broadcast. With the additional evidence now before the court (see par 32 above), this appears to be a submission that Canberra and Darwin ought to be excluded. This submission ignores the fact that the Advertisement was broadcast throughout Australia on the internet. It also ignores the fact that many persons in Canberra and Darwin are quite likely to have visited other major capital cities of Australia over the 24 day period in which the Advertisement was broadcast on television.
As to the frequency of such advertising, the publication is likely to come to the attention of a significant number of the members of the Class if it is published on a Wednesday and also a Saturday. Accordingly, I propose to order that this occur on the first Wednesday after this judgment is delivered, and then the following Saturday.
The form of this advertisement should be in accordance with annexure 2 to this judgment. It is not necessary to repeat the reasons already given above[59] as to why the corrective advertisement ought to be in such terms.
[59]At par 57(1), (4), (5) and (6) above.
To be effective, the corrective advertising needs to be given sufficient prominence. The suggestion by Telstra that it appear within the first 10 pages of the Newspapers is a reasonable suggestion,[60] and the court will so order. It also needs to be of a size which is likely to attract the attention of readers. The sizes suggested by Telstra[61] are appropriate.[62]
F.4.3 Websites of the Newspapers
[60]Cf, for example, Australian Competition and Consumer Commissioner v Allergy Pathway Pty Ltd [2009] FCA 960, order 3(a)-(h)(iii) (Finkelstein J).
[61]See fn 29 above.
[62]Cf Australian Competition and Consumer Commissioner v TPG Internet (No 2) (2012) ATPR 42-402, 45, 582.1 col 1, order 9(a) (Murphy J).
For the very reason that Optus, and to a lesser extent Telstra, submitted that the impact of advertising in newspapers has diminished, it is appropriate that the corrective advertising also be published on the websites of the Newspapers. As a significant section of the Australian community is now accessing the websites of newspapers for their news and information, rather than the traditional newspaper, the orders ought necessarily include the websites of the Newspapers. In other words, to not include these websites would leave an obvious and substantial gap in the dissemination of the corrective advertising.
Again, this form of advertising should accord with annexure 2. Given the nature of the medium concerned, the covering advertisement suggested by Telstra[63] with a link to the full advertisement is the appropriate means to convey the notice.
[63]See par 39(3) above.
I accept Telstra’s submissions that it is appropriate that if a person clicks on the link referred to in the advertisement, she or he will only be taken to the notice.
As to the timing of the advertisements on the websites of the Newspapers, it should coincide with the publication of the advertisements referred to in section F.4.2 above.[64] To be clear, the advertisements should be published on the Wednesday of the same week that the corrective advertising is to be published on the Wednesday and the Saturday in the Newspapers, and continue until midnight on the following Tuesday.
F.4.4 Point-of-sale advertising at Optus shops
[64]At par 69 above.
Notwithstanding the extent of the corrective advertising that is to be ordered, there must still be a real risk that members of the Class labouring under the misapprehension created by the Representations will not see the corrective advertising. Such persons may enter an Optus shop for the purpose of committing to a plan with Optus for a mobile phone (whether post-paid or pre-paid).
Accordingly, it is also appropriate that Optus publish a sign which is clearly visible at the point-of-sale at all its Optus shops (which is to include licensed dealerships and agencies) containing a notice in the form of annexure 2 to this judgment. For the reasons stated in footnote 58 above, there is no good reason to exclude any of the Optus shops from this corrective advertising regime.
Telstra has asked for this notice to be published for a period of 30 days. Given the extent of the broadcasting of the Advertisement and the nature of its contents, this is a reasonable period. I will order the notice to be put in place for that period of time from the date when the corrective advertising commences.
Telstra also sought that the notice be of a size of no less than A1 format, which is 594mm x 841mm. In my view, to require the notice to be published at this size would be excessive. The message to be conveyed by corrective advertising can be properly done with an A3 sign (ie 297mm x 420mm) appropriately displayed within the Optus shop. Anything greater than this would be punitive.
F.4.5 Advertising on the Optus Webpages
A customer or potential customer of Optus is able to enter into a plan for a post-paid or pre-paid mobile phone with Optus by accessing the Optus website. Given this fact, together with the previous broadcasting of the Advertisement on Optus’ website, it is also appropriate that corrective advertising appear at this location.
In rejecting the 5 webpages suggested by Telstra,[65] Optus submitted that if corrective advertising is to occur on Optus’ website, it should be confined to the Mobile Phones Page. In response to this submission, after the hearing, Telstra informed the court that it no longer pressed corrective advertising to be displayed on the Pre-paid Mobile Page or the Network Mobile Coverage Page, but continued to press for corrective advertising on the remaining 3 webpages of the Optus Webpages.
[65]See par 40 above.
Each of the Mobile Phones Page, the Home Page and the My Plan Page is a distinct webpage. These pages may be accessed by consumers directly by conducting a search on a search engine on the internet or by entering the relevant URL[66] in the address bar of an internet browser. Significantly, when such a search is conducted using terms such “Optus”, “Optus mobile plans”, or “Optus coverage”, the results returned include, amongst other things, individual and direct links to some or all of the Optus Webpages.
[66]URL stands for “uniform resource locator”.
Accordingly, there is no requirement for a consumer to first access the 1 particular webpage before reaching the desired site of the Optus Webpages. In these circumstances, it is possible that a member of the Class viewing an Optus webpage, either directly or via a search, may not see the corrective advertising if it is confined to the Mobile Phones Page (or any 1 of the other Optus Webpages).
In light of the above matters, it is appropriate that the corrective advertising not be confined to the Mobile Phones Page. It should also appear on the Home Page and the My Plan Page as these are other pages to which members of the Class may visit without necessarily visiting the Mobile Phones Page.
I accept Telstra’s submission that corrective advertising should appear immediately upon access to each of the relevant webpages and, consistent with the point-of-sale notifications, should be maintained at the relevant websites for a period of 30 days from when the corrective advertising is scheduled to begin. However, I do not accept that such an advertisement should be by way of a “pop-up” window where a member of the public is required to close the window or message box. In my view, this is overly intrusive, and disproportionate.[67]
[67]For example, in Australian Competition and Consumer Commission v Willesee Healthcare Pty Ltd (No 2) [2011] FCA 752 (Dodds-Streeton J), no such requirement was imposed: see order 7.
Accordingly, it will be ordered that Optus publish on the Home Page, the Mobile Phones Page and the My Plan Page corrective advertising in the form of annexure 2 to this judgment, such advertising to be in no less than size 12 font. Further, the corrective advertising must be fully visible on the relevant webpage when that page is opened by a member of the public.
G. Conclusion
For the reasons stated, it is appropriate that declarations be made and that corrective advertising be ordered. To the extent reasonably practicable, the declarations, coupled with the corrective advertising, will ameliorate the position which has arisen by reason that the Geographic Coverage has been seriously misrepresented in relation to both mobile phone networks.
Declarations will be made as follows:
Over the period from about 26 January 2014 to about 18 February 2014, Optus in trade or commerce:
(a)engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of section 18 of the Australian Consumer Law contained in schedule 2 of the Competition and Consumer Act 2010 (Cth) (“Australian Consumer Law”);
(b)in connexion with the promotion of the supply of services, falsely represented that services are of a particular standard, quality, value or grade in contravention of section 29(1)(b) of the Australian Consumer Law; and
(c)in connexion with the promotion of the supply of services, falsely represented that services have performance characteristics, uses or benefits they do not have in contravention of section 29(1)(g) of the Australian Consumer Law,
by causing to be broadcast or otherwise published the advertisement referred to in paragraph 5 of the amended statement of claim, and thereby falsely representing that:
(d)the Optus mobile network and the Telstra mobile network cover 98.5 per cent and 99.3 per cent of the Australian land mass respectively, when in fact the Optus mobile network covers about 1 million square kilometres, that is approximately 12.6 per cent, and the Telstra mobile network covers 2.356 million square kilometres, that is approximately 30.6 per cent, of the Australian land mass;
(e)the geographic coverage of the Telstra mobile network is less than 1 per cent greater than the geographic coverage of the Optus mobile network, when in fact the geographic coverage of the Telstra mobile network is significantly greater than the geographic coverage of the Optus mobile network; and
(f)the difference between the geographic coverage of the Telstra mobile network and that of the Optus mobile network is minimal and insignificant, when in fact the differences are material and substantial.
As to the precise form of orders in relation to the corrective advertising, I will invite the parties to prepare a minute of orders which reflects these reasons and inserts the appropriate dates.[68] If necessary, I will also allow further submissions to be made to the court if, for some substantive reason, the corrective advertising is unable to commence as foreshadowed.
[68]See annexure 3.
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FOOTNOTE: On 23 June 2014, the following orders were made by consent:
1. The defendant pay the amount of $3,000 in full and final settlement of the plaintiff’s remaining costs of the proceeding.
2. The proceeding be otherwise dismissed.
Annexure 1 (See paragraph 57 above.)
[date: to be no earlier than the day the letter is sent]
[TO BE PLACED ON OPTUS LETTERHEAD]
[insert name and address of Optus customer]
Dear [insert name of customer]
Misleading and deceptive claims made by Optus regarding Optus’ and Telstra’s geographic and comparative coverage
The Supreme Court of Victoria has ordered that Optus Singtel Pty Ltd (“Optus”) provide all Optus customers who have entered into a post-paid plan with Optus from 26 January 2014 to [up to and including 14 days after the corrective advertising commences ] (inclusive) with the information set out in this letter.
The Supreme Court has found that Optus engaged in misleading or deceptive conduct in relation to an advertisement which it caused to be broadcast from about 26 January 2014 until 18 February 2014 which compared Optus’ mobile network coverage with that of Telstra Corporation Ltd (“Telstra”).
The Misrepresentations
The Court found that by publishing the advertisement, Optus falsely represented that:
1the Optus mobile network and the Telstra mobile network cover 98.5% and 99.3% of the Australian landmass respectively, when in fact the Optus mobile network covers about 1 million square kilometres, that is approximately 12.6%, and the Telstra mobile network covers 2.356 million square kilometres, that is approximately 30.6%, of the Australian landmass;
2the geographic coverage of the Telstra mobile network is less than 1% greater than the geographic coverage of the Optus mobile network, when in fact the geographic coverage of the Telstra mobile network is significantly greater than the geographic coverage of the Optus mobile network; and
3the difference between the geographic coverage of the Telstra mobile network and that of the Optus mobile network is minimal and insignificant, when in fact the differences are material and substantial.
It was not in dispute that the Optus mobile network reaches 98.5% of the Australian population and that the Telstra mobile network reaches 99.3% of the Australian population.
What to do
If you believe you have selected your current plan with Optus because of the representations about geographic coverage made by Optus in the advertisement, you are entitled to cancel your plan with Optus. This must occur within 28 days of the date of this letter (the date of this letter not to be included in the calculation of 28 days). We will not charge you any cancellation fee for doing so. If you were supplied with a mobile telephone handset as part of the plan, you will need to return this phone to Optus.
In order to cancel your plan, please visit any Optus store and if you were supplied with a mobile telephone handset as part of your plan, bring that with you. Otherwise contact us on [a designated telephone number has been provided by Optus, which shall be inserted in each letter].[69]
[69]Optus requested the number not be included in the judgment to avoid congestion of the dedicated telephone line. No objection was taken to this approach. The number shall be answered by persons specifically dedicated to respond to the issues in the letter.
Yours sincerely
[insert details of person signing]
Annexure 2 (See paragraphs 70, 73, 77, 86.)
A correction from Optus regarding the comparative coverage of the Telstra and Optus mobile networks
In a television advertisement broadcast from about 26 January 2014 until 18 February 2014, Optus represented that the difference between the Optus mobile network and Telstra’s mobile network is minimal and insignificant.
The Supreme Court of Victoria has found that by broadcasting the advertisement, Optus engaged in conduct that is misleading and deceptive and made false representations in breach of the Australian Consumer Law.
In particular, the Court found that Optus falsely represented that:
1the Optus mobile network and the Telstra mobile network cover 98.5% and 99.3% of the Australian landmass respectively, when in fact the Optus mobile network covers about 1 million square kilometres, that is approximately 12.6%, and the Telstra mobile network covers 2.356 million square kilometres, that is approximately 30.6%, of the Australian landmass;
2the geographic coverage of the Telstra mobile network is less than 1% greater than the geographic coverage of the Optus mobile network, when in fact the geographic coverage of the Telstra mobile network is significantly greater than the geographic coverage of the Optus mobile network; and
3the difference between the geographic coverage of the Telstra mobile network and that of the Optus mobile network is minimal and insignificant, when in fact the differences are material an substantial.
The Supreme Court has made orders restraining the further broadcast of the advertisement.
It was not in dispute that the Optus mobile network reaches 98.5% of the Australian population and the Telstra mobile network reaches 99.3% of the Australian population.
The Court has also ordered Optus to write to all customers who entered, or may enter, into a post-paid mobile plan from 26 January 2014 to [up to and including 14 days after the corrective advertising ceases] (inclusive) informing them of the outcome of the Court proceeding, and advising them that they are entitled to cancel their contract with Optus without any early cancellation fee being payable.
This Corrective Advertisement has been paid for by Optus Singel Pty Ltd and placed by Court Order of the Supreme Court of Victoria.
Annexure 3 (See paragraphs 59(fn 53), 60 (fn 55), 89(fn 68).)
| Form | Date commences | Dates ceases |
| Letter | Within 7 days[70] | 16 May 2014 |
| Newspapers | 2 April 2014 | 5 April 2014 |
| Newspapers’ websites | 2 April 2014 | 8 April 2014 (midnight) |
| Point-of-sale | 2 April 2014 | 2 May 2014 (close of business) |
| Optus webpages | 2 April 2014 | 2 May 2014 (midnight) |
[70]For existing Optus customers, this signifies within 7 days of the order of the court. In relation to future customers of Optus up to and including midnight on 16 May 2014, this signifies within 7 days of any such customer entering into any post-paid mobile telephone plan.
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