Owners of businesses need to exercise care when making comments online about their competitors or industry, even where those comments are posted on a  personal blog - be it a personal Facebook page, blog or Twitter account as demonstrated by the  recent Federal Court case of Nextra Australia Pty Limited v Fletcher2, in which an online blog post amounted to misleading and deceptive conduct, and therefore breached section 18 of the  Australian Consumer Law (ACL).

Who said what

The case arose in relation to an article about Nextra posted on the website of the “Australian  Newsagency Blog” (the Blog) a newsagency industry blog personally operated by Mr. Mark Fletcher, a part owner of NewsXpress and operator of his own newsagencies. Nextra, the franchisor of a newsagency  franchise system is a direct competitor to NewsXpress. The article written by Mr Fletcher was entitled “Nasty campaign from Nextra misleads  newsagents”, and criticised a recruitment flyer distributed by Nextra to prospective franchisees.

The flyer was intended to encourage newsagents to leave their current marketing or franchise group  and join Nextra. The flyer claimed “There are many stores changing to the Nextra Group” and called  for newsagents to “Believe the Industry Rumours” and to “Take the Logical Step to improving your  GP.” The flyer contained a number of testimonials from current and former Nextra newsagents.

In his article Mr Fletcher claimed the Nextra flyer contained false and misleading information.

Nextra applied to court for orders to restrain what it alleged was misleading or deceptive conduct by Mr Fletcher, including to:

  • remove the article from the Blog as well as any responses or comments received;
  • restrain Mr. Fletcher from publishing the article in any other form; and
  • publish on the Blog a retraction of the article and an apology to Nextra.

What the court said

The first issue for the court to determine was whether Mr. Fletcher’s posting of the article on the Australian Newsagency Blog constituted conduct engaged “in trade or commerce” which would therefore be covered by the misleading and deceptive conduct provisions of the ACL.

Nextra submitted that Mr. Fletcher, through the Blog, promoted his personal commercial interests (in particular the NewsXpress franchise) and in seeking to attack Nextra through the article, was protecting his own commercial interests.

The Court stated that where a person works in a particular industry, it would not always be conduct “in trade or commerce” for the person to engage in an activity relating to that industry. Self-publication by a person of articles or thought pieces relevant to a particular industry, including for example, on a blog, is not necessarily conduct “in trade or commerce” where for example it is clear that the blog is merely the publisher’s personal opinion on topics for the interest of readers.

Mr. Fletcher claimed he published the Blog for altruistic reasons, being for the information and benefit of the newsagent community, noting that the Blog contains articles on numerous topics unrelated to his own commercial interests.

However, the Court found that Mr. Fletcher’s motives for posting the article on his Blog were in fact mixed. The Court was satisfied that although Mr. Fletcher had a genuine interest and aim in promoting discussion in the newsagency community on topics of interest to newsagents, and that the Blog was a key element in achieving that objective, he did not hesitate to use the Blog to promote his own commercial interests.

Although he did not purport to post the article on behalf of NewsXpress, the Court found that it was clear that he did so to defend NewsXpress from what he saw  as potential poaching of franchisees by Nextra. The Court was satisfied that the posting of the  article was therefore conduct “in trade or commerce” within the meaning of the ACL.

The Court was also satisfied that Mr. Fletcher had engaged in misleading and deceptive conduct in  contravention of the ACL. The article was ordered to be removed from the Blog website and Mr.  Fletcher was restrained from publishing the article in any other form. The Court did not order Mr.  Fletcher to publish an apology or corrective advertising, as to do so would only draw attention to  the article and be counterproductive.

Take Precautions

Franchisors and franchisees should be aware that any blog posts, articles or comments made online  which may be seen to be promoting one’s own commercial interests may be deemed to be ‘in trade of  commerce’ and may breach section 18 of the ACL if found to be misleading and deceptive.

A number of steps should be taken when maintaining an online presence:

  • ensure you (and if you are a franchisor, your franchisees) do not publish potentially damaging  content about competing businesses, even if published in a personal blog, as this may have a  ‘commercial’ character. Having a social media policy in place will greatly assist; and
  • actively monitor your social networking and other blogging and industry websites for relevant  content to ensure you  are aware of  outside publications containing potentially damaging content  to your business and brand.