REA Group Limited v Fairfax Media Limited [2017] FCA 91: False and Misleading Conduct

Wednesday 15 February 2017 @ 11.59 a.m. | Trade & Commerce

A Federal Court in Melbourne has ruled in favour of Fairfax Media in the majority of contended issues in the case of REA Group Limited v Fairfax Media Limited [2017] FCA 91. Fairfax Media’s subsidiary Domain’s series of advertisement were contested by REA Group for false and misleading and deceptive conduct in relation to the claims the ads made. Out of the seven contended ads, the Federal Court ruled that only two constituted misleading or deceptive conduct.

Background to the Case

The two real estate sites have been embroiled in a legal battle since February 2016 after Domain launched a new advertising campaign claiming to be the number one real estate app along with several other claims relating to being the best app. Its major competitor, REA Group who runs and operates realestate.com.au commenced legal proceedings to challenge Domain’s advertising as being in breach of consumer laws. The Ads by Domain also claimed that it had the ‘most listing in Sydney’.

Judgment

After assessing each of the seven advertisements, Federal Court Justice Bernard Murphy ruled that the majority of the ads were entirely reasonable or simply ‘advertising puffery’. Regarding the claim that it had the ‘most listing in Sydney’, Justice Bernard held that this was misleading and deceptive conduct as factually this was not the case. He said:

"I also find that in representing that the Domain app is the number one property app in Australia because it allows users to view the most property listings in Sydney Domain made false or misleading representation that its service was of a particular standard, quality or grade, in breach of...the ACL,"

The Court was able to arrive at this conclusion after expert witness analysed the data and found that the REA Group had more listings overall than Domain in Greater Sydney between September 2015 and February 2016. However, Justice Bernard did not extend this reasoning to the claim that Domain had the ‘best listings’ in Melbourne as ‘best’ did not imply a particular measurable standard and most customers would identify it as simply puffery.

Justice Bernard also dismissed the claim that the ad suggesting Domain was Australia’s ‘highest-rated property app’ was misleading or deceptive. He said:

"I see it as quite unlikely that the ordinary or reasonable member of either target class would reach the view that there was some unidentified independent body which rated property apps against some unknown criteria. It is uncontroversial that no such body exists, and I am not satisfied that the ordinary reader would think that it did."

He further explained that users of the app store are usually aware that ratings are given and written by other customers. 

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