Industry blogs – a double-edged sword

Articles, Procedure + Litigation

The popularity of industry blogs has expanded dramatically as businesses recognise the potential to facilitate engagement with existing clients and attract new ones. However, those who intend to use blogs as a platform to derogate competitors ought to heed the warning of the Full Court of the Federal Court of Australia in the recent decision of Fletcher v Nextra Australia Pty Ltd [2015] FCAFC 52 (Fletcher v Nextra). That case established that blogging may be an activity in trade and commerce, and as a consequence may attract sanctions for misleading or deceptive conduct.

Nextra Australia Pty Limited (Nextra), the franchisor of a newsagent franchise, had published a promotional flyer which was intended to encourage non-member newsagents to join the Nextra Group. Mr Fletcher was  a director and 50% shareholder of newsXpress Pty Limited (newsXpress), a competitor of Nextra. He operated a blog styled The Australian Newsagency Blog and on that blog published an article entitled ‘Nasty campaign from nextra misleads newsagents‘. The subject of the article was the flyer that had been distributed by Nextra.

Nextra contended that the article constituted misleading or deceptive conduct in trade or commerce.

The central issue on appeal was whether Mr Fletcher’s conduct was ‘in trade or commerce’. The court noted, relying on the High Court decision in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 (Concrete Constructions), that the phrase ‘in trade or commerce’ has been afforded a restrictive operation. As such, the effect of the provision is confined to conduct which ‘is itself an aspect or element of activities or transactions which, of their nature, bear a trading or a commercial character’.

Mr Fletcher submitted that editorialising in a trade publication would not be regarded as conduct in trade or commerce.  Consistently with this, he said, the content of the article was not such as to amount to “promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers”, being the test flowing from Concrete Constructions.

However, the court found that Mr Fletcher was not an independent commentator who was editorialising in a trade publication, but was rather an active participant in the newspaper franchise industry and intended his conduct to have an impact on trading or commercial activities. In support of this proposition, the court relied on a number of factors including:

  1. The strength of the language used in Mr Fletcher’s article, the entirety of which was an attack on Nextra, referring to false and misleading statements in the Nextra Flyer. It was not part of a ‘wide-ranging’ review on a topic;
  2. The entity which Mr Fletcher was attacking was his direct business competitor;
  3. The primary judge made a reasonable finding that the purpose of the article was to protect Mr Fletcher’s own business interests which were adversely affected by losing franchisees to Nextra as a result of what he said were false and misleading statements by Nxtrea in its flyer.

The decision is a useful reminder to those who contribute to industry blogs, that such blogs may be considered to be published in the course of ‘in trade or commerce’. Accordingly, contributors need to be diligent in ensuring that publications do not constitute misleading or deceptive conduct.

 

 

 

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