The recent appeal decision in Fletcher v Nextra reinforces the Court’s willingness to apply Australian Consumer Law (ACL) to different internet mediums and serves as an important reminder to bloggers of the dangers of uploading articles which might constitute misleading and deceptive conduct in particular circumstances.
This issue has been dealt with by the Court on numerous occasions. In 2012, a designer was ordered to pay Seafolly damages for engaging in misleading and deceptive conduct by posting on Facebook about the similarity of Seafolly’s bikini line to her own company’s (see our blog post here). The case highlighted the blurred distinction between personal and professional internet mediums in determining whether actions are “in trade or commerce” within the meaning of s 18 of the ACL.
Now in Fletcher v Nextra, the Full Federal Court of Australia has upheld a decision by the Federal Court that a blogger’s publication of an article on an internet blog amounted to misleading and deceptive conduct. This case represents one of the first times a court has considered whether a blog, and a supposedly educational one at that, can amount to being in “trade or commerce”.
The blog post
Both the appellant and respondent were involved in the newsagency industry. The appellant Mr Fletcher is a director and 50% shareholder in newsXpress Pty Ltd (newsXpress). The respondent Nextra is a competitor of newsXpress.
On 27 April 2011, Mr Fletcher posted a blog article which was critical of a flyer circulated by Nextra Australia Pty Ltd (Nextra). The flyer had been distributed to encourage newsagents to join the Nextra Group.
Mr Fletcher posted his article to the Australian Newsagency Blog.
While Mr Fletcher claimed that his post was merely to encourage debate regarding the flyer, in its first instance judgment, the Court held that Mr Fletcher was liable for misleading and deceptive conduct in contravention of s 18 of the ACL. Key to this finding was that Mr Fletcher had erroneously asserted on his blog that the flyer did not properly differentiate between those who had signed up for the full service Nextra group franchise and those who had signed up for the cheaper News Extra franchise (number 5 on the blog post). The Court held that this statement was undoubtedly false as the flyer clearly did distinguish between these.
In trade or commerce
Mr Fletcher appealed the decision and critical to his appeal was his argument that publishing the blog article was not conduct “in trade and commerce” as required by s 18 of the ACL.
Some key relevant facts relied on by the Court at first instance were that:
a. newsXpress was the franchisor of a newsagency franchise in competition with Nextra;
b. Mr Fletcher was a director and part-owner of newsXpress;
c. Mr Fletcher owned 100% of Tower, which sells point of sale software for newsagents;
d. Mr Fletcher appreciated the status and authority that the publication of the Blog conferred on him in the newsagency community;
e. Mr Fletcher had previously used the Blog to promote his own commercial interests;
f. 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
g. the posting of the Article was to defend newsXpress from what Mr Fletcher saw as potential poaching of franchisees by Nextra.
(At  of Fletcher v Nextra  FCAFC 52.)
Although Mr Fletcher argued the entire blog post represented his opinion, this was insufficient given that some statements made in the post were clearly of fact. The above circumstances collectively lead to the conclusion that the blog post was “in trade or commerce”, a finding that was upheld in the appeal judgment, as was the conclusion that Mr Fletcher had contravened s 18 of the ACL. Among the remedies obtained by Nextra, Mr Fletcher was required to take down his post.
The decision is a warning to bloggers to be wary of posts which might mislead and deceive, particularly where the Court may determine that the post was not authored by an independent commentator, but rather as part of the competitive process, especially if it is intended to “take down” the competition.