Exercising care online in business

28 March, 2018

The internet has provided us with the amazing ability to access vast amounts of information at the click of a button. We have the ability to access images, articles, newspapers, magazines and much more. Even easier is the ability to make ourselves heard by placing our own comments and thoughts online for others to see.
But this can be very dangerous.

People in business need to be careful about what they post or make comment about online because if the post or comment has a commercial quality about it and is untrue or inaccurate then they may fall foul of section 18 of the Australian Consumer Law contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (“ACL”). Section 18 of the ACL provides that a person must not, in trade or commerce, engage in conduct which is misleading or deceptive or likely to mislead or deceive. 
In  a recent legal case of Fletcher v Nextra Australia Pty Ltd [2015] FCAFC 52, Mr Fletcher appealed the decision in Nextra Australia Pty Ltd v Fletcher [2014] FCA 399 where it was held that his publication of an article on an internet blog constituted misleading and deceptive conduct in trade or commerce in contravention of section 18 of the ACL.
In the appeal, the Court noted that some of the key facts which the primary judge relied on, on reaching a conclusion that the publication of the article by Mr. Fletcher constituted misleading and deceptive conduct in trade or commerce. They included the following:

  1. NewsXpress was the franchisor of a newsagency franchise in competition with Nextra. Nextra is the franchisor of a national news agency franchise system known as the Nextra Group;
  2. Mr. Fletcher was a director and part-owner of newsXpress;
  3. Mr. Fletcher owned 100% of Tower, which sells point-of-sale software for newsagents;
  4. Mr. Fletcher appreciated the status and authority that the publication of the blog conferred on him in the newsagency community;
  5. Mr. Fletcher had not previously hesitated to use the blog to promote his own commercial interests;
  6. The article is an example of Mr. Fletcher using the blog for commercial purposes, namely, to promote newsXpress and his business interests in Tower; and
  7. The posting of the article was for the purpose of defending newsXpress from what he saw as potential poaching of franchisees by Nextra.

In addition to the above, the Court also noted that:

  1. aside from the relevant context being the newsagency industry rather than the fashion industry, the relevant facts under consideration were similar to those in Madden v Seafolly (2014) 313 ALR 1 (“Seafolly”);
  2. like in Seafolly Mr. Fletcher had a commercial interest in attacking a competitor; and
  3. remarks by a commentator, as distinct from an industry participant, where they are unlikely to be intended to have an impact on trading or commercial activities would not be conducted in trade or commerce. Mr. Fletcher, however, was not an independent commentator. He was an active participant in the newspaper franchise industry and intended his conduct to have an impact on trading or commercial activities.

In Seafolly, statements were made on Ms. Madden’s personal Facebook page as well as on the Facebook page of her business “Whitesands” and in emails to various media outlets. The Full Court found that the statements published on her personal Facebook page were misleading and deceptive conduct made in trade or commerce and upheld the findings of the primary Judge at first instance that:
“… Ms. Madden was the principal of Whitesands, a trade competitor of Seafolly. Her statements related to the manner in which Seafolly conducted its business. She alleged that Seafolly had engaged in conduct which was improper to the detriment of her own business. She thereby sought to influence the attitude of customers and potential customers of Seafolly.”
Regardless of the industry in question, all businesses want to obtain a competitive advantage but be mindful of the way you conduct yourself online. Once you put something out there, the chances are you may never be able to delete it.

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