“I am the Greatest” – when exaggerated claims in advertisements are misleading

Two leading real estate advertising companies have gone head-to-head in the Federal Court in the case of REA Group Limited v Fairfax Media Limited [2017] FCA 91 over an advertising campaign run by Fairfax Media (Fairfax) for their popular property destination, Domain.

REA Group Limited (REA), who are associated with realestate.com.au, alleged that Fairfax had breached the Australian Consumer Law (ACL) for misleading claims about Domain’s offering, including that the Domain website and app had the “most property listings in Sydney” and that the Domain app was the “#1 property app in Australia”.

The Australian Consumer Law

The case was brought under section 18 of the ACL which provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive, and section 29 of the ACL which provides that a person must not, in trade or commerce, in connection with the supply or promotion of goods or services, make a false or misleading representation.

Whether conduct or a representation is false or misleading will depend on the circumstances and generally the courts will find a breach of the ACL where a person has been led into error, rather than merely being caused to wonder about the conduct or representation.

“Courts look for consumers being led into error, rather than being caused to wander”

Claims

In relation to Fairfax’s claims that the Domain website and app has the “most property listings in Sydney”, evidence presented by REA established that this was not the case; in fact, over the relevant period, REA had more property listings overall in the greater Sydney area than Domain. Given this factual inaccuracy, the Court found that in publishing this advertisement, Fairfax engaged in misleading or deceptive conduct or conduct which was likely to mislead or deceive and made false or misleading representations, in breach of section 18 and 29 of the ACL.

However, the Court found in favour of Fairfax in all other claims, including Fairfax’s broad assertion that the Domain app was the “#1 property app in Australia”. In this instance, the Court concluded that the ordinary reasonable reader would be accustomed to exaggerated, or “puffing”, representations in advertising, and would know that claims to be ‘No.1’, ‘the best’ or ‘the greatest’ are commonly made in trade and do not amount to a breach of the ACL.

Lessons Learned

Agencies and brands must observe the fine distinction between a statement or representation that is an exaggeration or puffery, which the courts generally accept as a common advertising practice, and one that is false or misleading. This case tells us that the Court’s approach to what is permitted in advertising is fairly lenient, however, conduct that is based on blatant falsities will not be accepted. Want to know more? Contact us here.