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Have you ever claimed to be Australia’s number one in something? Television network Nine was recently subject to a potential court battle from rival network Seven due to Nine’s claim that it ran Australia’s number one breakfast show. Seven responded by filing a misleading and deceptive conduct claim. Below, we break down what happened between the two network giants, what makes conduct misleading and the penalties that may apply.

What Happened?

In October 2016, Seven Network took Nine Network to court over Nine’s claims that the Today show, had “triumphed in the 2016 rating year to regain the crown as Australia’s favourite breakfast program”. This would have been the first time since 2003 than Today won the breakfast TV ratings.

Seven, which airs rival breakfast show Sunrise, filed a statement of claim in the Federal Court stating that Nine had engaged in misleading and deceptive conduct under Australian Consumer Law. Seven’s basis was that Sunrise was still Australia’s number one breakfast show because it had the highest ratings across the city and regional centres, whereas Nine used ratings from the five major metropolitan markets only. As a result, Nine was misleading viewers and consumers because they did not take into account about seven million Australians who lived outside the five mainland cities.

The parties settled the matter outside of court with Nine agreeing not to refer to Today as Australia’s number one breakfast show and Australia’s most watched breakfast program to avoid a costly court battle. As such, while we will not know what a court would have ruled, the case still brings several important issues to light.

What’s the Difference Between Misleading and Deceptive Conduct and Puffery?

Under section 18 of the Australian Consumer Law, a person must not engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Conduct can mislead if it creates a false or inaccurate overall impression on its intended audience.

Puffery, on the other hand, refers to wildly exaggerated or fanciful claims that no reasonable person could treat seriously. For example, all your dreams will come true if you consume Dream Factory’s Cotton Candy.

As there is no legislative distinction between puffery and misleading and deceptive conduct, it is generally up to the court to make the distinction based on the facts of the case. In the case of Nine’s claim in being the number one breakfast show in Australia, this is not puffery as such a statement is supposedly based on statistics and is not meant as an exaggeration.

What are the Penalties?

If a party succeeds in their claim of misleading and deceptive conduct, a court may levy a broad range of civil penalties against the responsible party including damages, injunctions and compensatory orders. For example, in 2012 the Federal Court ordered Optus to pay $3.6 million for misleading and deceptive conduct in its advertisements, noting that not only were the contraventions on a grand scale, but also Optus was not a first time offender.

Key Takeaways

Businesses should always be careful of the representations it makes to anyone else, whether it is to another business or consumer. When commenting on the decision to settle the matter, a spokesman for Nine adjusted his position, clearly stating that “we’re number one across the five capital cities”. If you have any questions about your consumer law obligations or need assistance drafting your advertising collateral, get in touch with our consumer lawyers on 1300 544 755.

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