Telstra has commenced proceedings against Optus in the Supreme Court of Victoria alleging that Optus’ advertisements mislead or deceive consumers into thinking that Optus has the best mobile network in Australia, including by using phrases such as “best in test” and “empires end”. On the same day, Optus commenced an action against Telstra in the Supreme Court of NSW for misrepresenting Telstra mobile data offerings as “unlimited”.
Optus’ “best in test” claim
Optus’ “best in test” claims relate to the “2017 P3 Mobile Benchmark” that compared Australian mobile phone providers (the P3 Report). The P3 Report found Optus to be the leader in the voice category and Telstra to be the leader in the data category and found that Optus was the overall leader.
Telstra has alleged that the P3 Report was not a national benchmark and did not test all geographic areas of Australia as it covered only 61% of the total Australia population.
An Optus spokesperson has said that Telstra has “clearly lost its sense of humour”. This suggests Optus may seek to defend its “best” claims as “advertising puffery” – arguing they are statements with no definite meaning and not something the average person would rely on when choosing a provider.
Relevantly, in early 2017, real estate advertiser Domain (Fairfax Media Limited) and its rival, the REA Group, appeared in the Federal Court over six of Domain’s advertisements which REA Group argued were misleading or deceptive.
It was found that without more, a broad reference to Domain as having the “No.1 Property app in Australia” was puffery. The Court found that Domain’s advertising would not cause the average reader to think Domain was superior to REA Group. Importantly the Court reiterated that where a claim is specific and measurable, it is less likely that it will be puffery.
Is Optus’ claim to be the “best in test” akin to Domain claiming to be “No.1”, a piece of puffery which, without more, would not be relied on by the average customer? Optus’ claim appears to be more specific than Domain’s, given it is connected to a third-party report that measures telco performance.
If the claim isn’t puffery, this case is likely to turn on the accuracy of the benchmarking in the P3 Report. If Telstra’s allegations regarding the limitations of the P3 Report are upheld, it will be interesting to see whether the Court will allow Optus to use the “best” claims based on the P3 Report findings.
Telstra’s “unlimited” claim
Optus has quickly responded, challenging Telstra’s “unlimited” mobile data plan advertisements as being misleading or deceptive in the Supreme Court of NSW, including Telstra’s use of the phrasing “One word from Australia’s best mobile network. Unlimited”.
It will be interesting to see the extent to which the Court will take into account the Industry Code telcos must abide by, the TCP Code, in reaching its decision on Telstra’s use of “unlimited”. In the TCP Code, an offer of ‘unlimited’ needs to be “genuinely unlimited and not subject to exclusions, including exclusions for various types of calls or usage, or selected parts of the network”.
One thing is for sure – if past advertising disputes between Telstra and Optus are anything to go by, these cases are likely to go the distance. Hopefully this will result in some more clarity from the Courts on how far advertisers can go in using comparative surveys as the basis of their marketing claims, and some parameters around “best” and “unlimited”.