In Nextra Australia Pty Limited v Fletcher [2014] FCA 399 the Federal Court held that a blogger was liable for misleading comments that he made about a flyer published by a competitor.
Nextra was a franchisor of a newsagency franchise. Mr Fletcher was a shareholder and director of a franchisor of a rival newsagency franchise, NewsXpress Pty Ltd. Nextra published a flyer (the Flyer) aimed at persuading newsagents to join the Nextra franchise. Mr Fletcher published a blog (the Blog) and on his Blog posted an article entitled “Nasty campaign from nextra misleads newsagents” (the Article), referring to the Nextra flyer. Nextra claimed that the Article was misleading and deceptive.
The question was whether, by publishing the Article, Mr Fletcher was engaging “in trade or commerce”. It is only possible to take action for misleading or deceptive conduct under the Australian Consumer Law if the conduct is “in trade or commerce”. Mr Fletcher argued that he published the Blog for altruistic reasons – for the interest, information and benefit of the newsagent community.
The Court noted that self-publication of articles or thought pieces relevant to a particular industry on, for example, a blog is not necessarily conduct in trade or commerce. The Court gave the example here of a blog that permits ventilation of personal opinions by the publisher on topics in which the blogger is interested and is provided for the interest of readers.
However, the Court found that the motives of Mr Fletcher for posting material on the Blog were mixed. He appreciated the status and authority that publication of the Blog gave him and did have a genuine interest and aim in promoting discussion in the newsagent community of topics of interest to newsagents. However, Mr Fletcher had not hesitated to use the Blog to promote his own commercial interests. The Court pointed to a number of articles on the Blog which either praised NewsXpress or another of Mr Fletcher’s businesses or criticised a rival franchise. The Blog even contained a job advertisement for one of the NewsXpress stores.
The leading case on this area of law was Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 where a misleading statement made by one worker to another was held not to be in trade or commerce. There the High Court held that “in trade and commerce” meant the central conception of trade or commerce and not the immense field of activities in which companies engage in the course of their overall trading activities. The dividing line may not be clear but the High Court gave the example of:
1. driving a truck painted with a competitor’s name in order to mislead customers – which would be in trade and commerce; vs
2. mere driving a truck – which without more would not be in trade or commerce.
The Federal Court in the Nextra case was satisfied that Mr Fletcher had used his Blog for commercial purposes and the Article was an example of this. Although he did not claim to post the Article on behalf of NewsXpress, that was what he was in fact doing. Mr Fletcher was ordered to remove the Article from the Blog.
The take home message from this is that when businesses engage in social media for purposes that include the promotion or protection of their business, their writings, if misleading, may well be scrutinised by a court and they may be liable for any damage caused.