By Brett Bolton, Special Counsel; Peter Travers,
A recent Federal Court decision shows that it's not just the
ACCC who uses the Competition and Consumer Act 2010 (the
Australian Consumer Law) to fight misleading or deceptive
advertising. Companies with a "bricks and mortar"
presence can also get in on the act against competitors who only
have an online presence.
Here, special counsel Brett Bolton and solicitor Peter Travers
review the facts of Specsavers Pty Ltd v Coastal Contacts (Aus)
Pty Ltd and Anor, and outline what companies that advertise
online can learn from this case.
Key lessons for advertisers
Specsavers v Coastal Contacts (Aus) provides a number
of key lessons for businesses that advertise online:
The Australian Consumer Law applies to online advertising just
as much as it applies to more conventional forms of
Advertisers should avoid using strong attractive words like
"free" or "guarantee" in their advertising
unless they can back their claims up, or unless any qualifications
or restrictions to those promises are equally prominent.
Advertisers should not assume that all visitors to their
website are "net savvy" and capable of navigating their
way by a series of mouse clicks or similar instructions to the
information they need to fully understand the offer.
An interlocutory injunction may be available if an applicant
can show a sufficiently strong case, and that damages would be an
inadequate remedy if the injunction was not granted.
Specsavers v Coastal Contacts
In Specsavers Pty Ltd v Coastal Contacts (Aus) Pty Ltd
 FCA 102, the Court granted Specsavers interim injunctive
relief, which restrains Coastal Contacts from engaging in
advertising that is alleged to be misleading or deceptive conduct,
or in breach of the Australian Consumer Law.
The matter involved an application by Specsavers for an
interlocutory (ie temporary until a final hearing) injunction
preventing Coastal Contacts from engaging in advertising that may
be in breach of the Australian Consumer Law. Specsavers, which
operates from "bricks and mortar" stores throughout
Australia, alleged that Coastal Contacts, which operates
exclusively through the internet, engaged in advertising that was
misleading or deceptive, or in breach of the single price
provisions of the Australian Consumer Law. The Court had to
consider the following representations that Coastal Contacts made
on the internet:
"Buy online and save up to 70%"
"Save 70% on Focus Daily"
"Superfast, Free Shipping"
"Focus Daily lenses only $18.99"
"Lowest Price Guarantee"
The Court found that Specsavers had a sufficiently strong case
to justify a temporary injunction on the basis that:
the advertisements could give the misleading impression that
the 70 percent saving related to Specsavers' prices (when in
fact it did not);
the Focus Daily lenses were only $18.99 when ordered in
quantities of eight or more boxes, and the price did not include
shipping, handling and insurance;
shipping was only free on orders over $99 and was restricted to
a particular method of shipment which was not the fastest mode of
transport available; and
the conditions of the lowest price guarantee, which were buried
in the online "fine print", meant that it could be
As a result, Coastal Contacts is prevented from engaging in
advertising until a full hearing, which might be several months
This case demonstrates how effective a temporary injunction can
be for a company with a sufficiently strong claim of misleading
advertising against one of its competitors.
For more information about the Australian Consumer Law, please
contact HopgoodGanim's Competition and Trade Practices
In some cases these fees or surcharges are higher than what a bank charges to these merchants for use of the system.
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