Demetriou avoids the Optus “gag”

By Alli Peacock

OPTUS has failed to gag AFL chief executive Andrew Demetriou from claiming the telco was “lifting” content owned by sporting bodies, behaviour “akin to stealing”.

Optus claimed Mr Demetriou had engaged in “misleading or deceptive conduct” by making public comments to the effect that it was engaging in illegal activities by operating its new TV Now Service. Justice Richard Edmonds dismissed Optus’ claim, in the belief that the general public and viewers were not likely to be misled or deceived by Mr Demetriou’s statement that Optus’ acts were “akin to stealing”.

This decision may come as a surprise for Optus, due their recent success in the court regarding their broadcasting rights. Earlier this month, Federal Court Judge held that Optus did not breach any copyright laws by broadcasting matches via its TV Now Service. This result proves that Courts try, wherever possible, to balance the right of free speech with the interests of the public.

Legal Issues
Australian Consumer Law (ACL), Section 18 Misleading and Deceptive Conduct and Common Law:
In order for Optus to support their initial claim, reliance was placed on section 18 of the ACL. Section 18 states that a person must not, in trade or commerce, engage in conduct that is misleading and deceptive or likely to mislead or deceive. It is an offence of strict liability, meaning the plaintiff must prove a causal link between the misleading conduct and the subsequent loss or damage suffered. There are four elements that must be satisfied in order for Optus to successfully claim ‘misleading and deceptive conduct’.
(i) Person: the defendant must be a person or corporation, clearly satisfied by the present case.
(ii) Trade or Commerce: The alleged statement must be expressed in a trade or commerce context. As Mr Demetriou made his statement in a public and commercial environment, it is likely to satisfy this element.
(iii) Engage in Conduct: As outlined by section 2(2)(a) of the ACL, the ‘conduct’ is reference to doing or refusal to act. Since Demetriou’s representation was made expressly (not by refusal to act or silence) there are no issues with satisfying this element.
(iv) Misleading or Deceptive: According to the four step test in US case Taco Company of Australia Inc v Taco Bell Pty Ltd, it is necessary to;

(1) identify the target group potentially exposed to the conduct,
(2) consider all within the target group,
(3) apply an objective test whether an ordinary/reasonable person would be deceived; and
(4) whether the error was induced by the defendant’s conduct.

The group affected here would be the general public and viewers of the Optus network. Considering all within this group, the court has found that the reasonable viewer is unlikely to be deceived by Demetriou’s statement. This is due to the lack of causal connection between the misleading statement and damage occurred.

Furthermore, case law suggests that defendants may be held liable for mere statements of ‘opinion’. In order for this to be satisfied however, the opinion must not be supported by facts (even if completely honest). In RAIA Insurance v FAI General Insurance the defendants were held liable as they purported to be experts with reasonable opinions. Conversely, Mr Demetriou gave little to suggest that he was an ‘expert’ in the field, rather than simply expressing an honest opinion. Therefore, failing to satisfy element four of section 18 and case authority, Optus cannot rely on a claim of ‘misleading and deceptive conduct’.

This blog is for discussion purposes only. This must not be considered legal advice.

For legal advice on this topic and references to any information in this article, please contact
Matt Burgess, Director:
Phone: +61 405 722 739
matt*bselaw.com.au
Skype:burgoasp
Connect with Matt on Linked In

Image Credit: Stuart Miles

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