There is no doubt that the Olympics are a brilliant example of global co-operation, athletic prowess and human endurance. They also happen to be good for business too, as the recent case of Australian Olympic Committee, Inc. v Telstra Corporation Limited  FCA 857 demonstrates.
The Rio Olympics are the most widely broadcast Games in history, with more and more viewers accessing content through PCs, tablets and mobile devices as opposed to more traditional mediums. Given the popularity of the Olympics, there was no doubt hot competition for carriers to be the official sponsors of the Games and their broadcast.
Despite its long history of sponsorship, Telstra is not an official sponsor of the Australian Olympic Committee for the Rio Olympics. It does, however, have an agreement with the Australian broadcaster to sponsor its coverage of the Rio Olympics and show Telstra advertisements across the different broadcast mediums.
Telstra took that opportunity to run advertisements with a distinctive sporting flavour, which you no doubt have seen. The advertisements show people watching a variety of different sporting events on their tablets and mobiles and then emulating what they saw, set to the song ‘I go to Rio’. For part of the advertisements, the words ‘Telstra is not an official sponsor of the Olympic Games, any Olympic Committees or teams’.
The Australian Olympic Committee (AOC) (and presumably the official sponsor of the Olympics, a Telstra competitor) was not happy with the advertisements. It argued that because the advertisements clearly had an Olympic ‘theme’, they conveyed a false representation that Telstra was an official sponsor of the AOC and the Rio Olympics. On this basis, according to the AOC, the advertisements constituted misleading and deceptive conduct under the Australian Consumer Law. The question the Court had to determine was whether the advertisements suggested to a reasonable person that Telstra is a sponsor of the AOC or the Rio Olympics.
The Court noted that Telstra had to ‘walk a fine line’ in the advertisements. It could promote its sponsorship of the television coverage, but could not represent that it was a sponsor of the AOC or the Olympics themselves. Ultimately, the Court felt that Telstra came very close to the line but did not cross it.
The Court considered that a reasonable person in this case is one who is likely paying only casual attention to the advertisements. The Court agreed that the advertisements had an ‘Olympic theme’ and were designed to capitalise on the Rio Olympics. However, because Telstra did not show Olympic athletes, events or symbols, but rather showed people watching sporting events, the advertisements represented a connection to the television coverage, as opposed to the Olympics themselves. Significance was also placed on the disclaimer appearing on the advertisements. It was held that if a viewer did believe that the advertisements represented Telstra as an Olympic sponsor, the disclaimer would correct that misunderstanding.
The key takeaway from this decision is that in some circumstances, it is possible for businesses to capitalise on an event or issue without being an official sponsor of it. However, extreme care must be taken to ensure that whatever promotion is done does not cross the ‘fine line’ between acceptable and misleading or deceptive.
Don’t make a false start and get disqualified - we can advise on all legal issues regarding advertising and promotional campaigns.