A workplace relations specialist breached Australian Consumer Law by making misleading representations that it was associated with government agencies, the Full Federal Court has ruled on appeal.
The Australian Competition and Consumer Commission (ACCC) launched proceedings in December 2018, alleging Employsure’s advertising misled consumers that it was, or was affiliated with, a government agency.
The six Google Ads, published between August 2016 and August 2018, featured headlines such as ‘Fair Work Ombudsman Help – Free 24/7 Employer Advice’ and ‘Fair Work Commission Advice – Free Employer Advice’ and appeared in response to search terms such as ‘fair work ombudsman’.
In October last year, Federal Court Justice John Griffiths found the ACCC hadn’t proved its claims. Employsure’s target market would understand the distinction between a ‘.gov’ and a ‘.com’ domain, for example, and it wasn’t deliberately trying to lure people away from agencies such as the FWC or FWO, he said.
But the ACCC announced it was appealing, and argued that the ads conveyed government affiliation representations and were therefore misleading and deceptive, or made false or misleading representations about Employsure’s services.
On Friday the Full Court upheld the appeal, with the bench noting it was “well satisfied” that the ads conveyed government affiliation representations.
The ad headlines, in a large and prominent typeface, associated the free “help” or “advice” with named government agencies, it said.
“The impression created by the headline was furthered because none of the Google Ads made any mention whatsoever of Employsure or that the advertised free advice was, in fact, not to be provided by the government agency named in the headline, but by an (unnamed) private company.”
Further, “it was not unreasonable for business owners interested in receiving free advice to respond to the call for immediate action rather than more carefully study the advertisement”, the bench said.
“The characteristics of the ordinary or reasonable business owner must take into account that many of them would not be shrewd and may be somewhat gullible, would not be wary, well educated, have a good facility in English, be digitally literate, experienced or commercially sophisticated,” it added.
Meanwhile, URLs such as ‘www.fairworkhelp.com.au/Fair-Work/Australia’ (in five ads) and ‘www.fairworkhelp.com.au/Fair-Work/Commission’ (in the sixth) could still be understood by a reasonable business owner as belonging to the Fair Work Commission.
“We consider the primary judge failed to recognise that an ordinary or reasonable business owner taking reasonable care of his or her own interests may have given only perfunctory attention to the Google Ad and may have taken in only its general thrust,” the bench said.
“That is particularly so when many business owners were reading the advertisement in a situation of urgency, and in circumstances where answering the call to action by clicking on the hypertext or calling the telephone number only required them to decide whether to take up a free offer. They were not being asked to decide whether to acquire an expensive product or service, and in such it is unrealistic to expect that an ordinary or reasonable business owner would have undertaken a careful comparison of the Google Ad with the other search results on the page so as to notice and take in the significance of the matters to which the primary judge referred.”
The bench ordered the parties to confer and agree on the form of any appropriate declaration or injunction, failing which they must make submissions on the same by 20 August.
Penalty and costs are also yet to be determined, but Employsure must pay the ACCC’s appeal costs.
The ACCC took the action after receiving more than 100 complaints about Employsure’s ads, according to deputy chair Mick Keogh.
“This finding by the Full Federal Court sends a very strong message to internet advertisers that misleading consumers and small businesses by using combinations of words that are the same or similar to the names of government agencies to attract customers risks enforcement action and significant penalties.”
Meanwhile Employsure says it is reviewing the decision, with a spokesperson noting “there are additional steps to be taken by the Court before this is resolved”.