CONSIDERATION
62 Global One and 6G submit that the Advertisements do not mislead the consumer because before any subscription can be purchased, the double opt-in procedure ensures that the information that appeared in writing in the Advertisements is conveyed to the consumer, who then understands the nature of the service to which he or she seeks to subscribe. The submission is that the conduct should be seen in its totality, which includes the airing of the Advertisements and the sending of the confirmatory text by Global One or 6G immediately upon receipt of the text from the consumer in accordance with the particular advertisement. That is, the whole of the conduct includes the double opt-in procedure.
63 Global One and 6G submit that if the whole of that conduct is taken into account, the consumer is not misled or deceived. Global One and 6G rely on Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, where the High Court found, in circumstances where a consumer had the opportunity to inspect the label of furniture that looked the same as the desired furniture, that there was no contravention of s 52 of the Act. Global One and 6G point out that Gibbs CJ observed at 199 that the conduct of a defendant must be viewed as a whole and that it is wrong to select some words or act which alone would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. Global One and 6G say that the consumer has a chance to "inspect the label" because of the double opt-in procedure so that, before finally subscribing, the consumer either understands the nature of the acquisition of the subscription service or does not proceed further. The system in place was not, Global One and 6G say, merely the production of the Advertisements but also included:
the instructions for the Advertisements to be aired within defined parameters, which included that the Advertisements should not be directed to under 18 year olds;
the establishment of a computerised network which sent a message upon receipt of the initial text from the consumer and only activated the subscription if the double opt-in response was received; and
the ability to terminate the subscription by texting "stop".
64 Global One and 6G contend that any confusion arising from the Advertisements is inchoate. There is, they say, no justification for focussing on only part of their conduct to see if, on its own, that part created a misleading impression. This is particularly so, they contend, where the component relied upon by the Commission had no commercial relevance and cannot, in a commercially sensible manner, be divided out of the totality of the arrangements necessary to obtain the subscription. To divide the conduct into component parts is, Global One and 6G submit, commercially unrealistic.
65 A comparable submission was considered by Tamberlin J in Trade Practices Commission v Optus Communications Pty Ltd and Another (1996) 64 FCR 326. His Honour said at 340 that he was not persuaded that any or all of the post-broadcast steps that had to be taken before a contract was entered into would dispel the impression generated by the misleading message in the television broadcast. His Honour said that the viewer would be 'enticed into the marketing web' by the particular advertisement. Justice Tamberlin referred to what had been said by Beaumont J in TEC & Thomas (Australia) Pty Ltd v Matsumiya Computer Co Pty Ltd (1984) 1 FCR 28 at 38: 'What is relevantly induced is the dealing or the negotiations, as distinct from the subsequent purchase itself.'
66 In Australian Competition and Consumer Commission v Dell Computers Pty Ltd (2002) ATPR 41-878, Jacobson J rejected the contention that subsequent disclosure to the customers when they made contact with the maker of the particular advertisement meant that there was no contravention of s 52 of the Act (at 45,021). His Honour observed that there was ample authority to the contrary of that contention, in particular, St Lukes Health Insurance v Medical Benefits Fund of Australia Ltd (1995) ATPR 41-428 at 40,823, where Northrop J concluded that misleading or deceptive conduct occurs at the time of the publication of the advertisement and that a subsequent explanation of the effect of an offer does not overcome misleading or deceptive conduct which had occurred at an early stage when a member of the public, seeing the advertisement, takes steps to enter into a contract. In ACCC v Singtel Optus at [26], Perram J rejected a similar submission and held that it is necessary to consider the initial inducement the advertisement provides; the fact that there is a subsequent action required is not sufficient to overcome misleading representations.
67 It is clear from these cases that conduct can contravene s 52 of the Act even if, ultimately, the consumer becomes aware of the true situation. However, each case must be looked at according to its facts. This is not a case where a consumer would be expected to examine the label of a product he or she was considering purchasing by reason of the identity of the manufacturer of that product. Here, the relevant conduct is the broadcast of each of the Advertisements in their totality. It is true that a prospective purchaser would be disabused of any misunderstanding by the double opt-in procedure but, if the Advertisements are misleading, that person would have already been misled.
68 The person to whom the representations are taken to have been directed is as set out in Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at [103]. Where there is no identified individual to whom a particular misrepresentation has been made but the advertisements are directed to members of a class, the inquiry is as to a hypothetical individual being the reasonable member of the class to whom the representation was directed. In the present case the relevant class is the general public. It is accepted by the parties that according to ACMA the number of mobile phone services in operation in Australia, as at June 2009, was 24.22 million. The relevant inquiry is what the Advertisements would have conveyed to members of the class (Campomar) and whether a significant number of this class is likely to have been misled or deceived (TV - am plc v Amalgamated Television Services Pty Ltd (1988) 12 IPR 85).
69 It follows from Campomar at [103] that the question is whether the misconception alleged to arise or be likely to arise is properly to be attributed to the ordinary and reasonable members of the class of prospective purchasers of the offered service. The Commission emphasises that a number of such prospective purchasers are under the age of 18 and, in particular in the case of the Justin Bieber Advertisement, under the age of 15.
70 The class ordinarily includes the inexperienced as well as the experienced, and the gullible as well as the astute. I propose to consider the effect of the Advertisements on a reasonable adult watching the Advertisements. If such a person is likely to have been misled it follows, in the absence of evidence to the contrary, that someone under the age of 18 would also be misled.
71 Common to each of the Advertisements is:
the fact that the word "subscribe" is only used at the commencement of the Advertisements;
background music;
moving images;
the information that a number or word needs to be texted;
the number to which the text message must be sent;
the voiceover referring only to one specific ringtone, quiz or game, rather than to an ongoing subscription service with an initial sign-up fee and a daily or weekly subscription fee which is not terminated until the consumer sends a subsequent "stop" SMS;
the small size on the screen of the written text containing the subscription information;
the ephemeral nature of a television broadcast, which does not enable the consumer to re-read the material as in a printed advertisement. Apart from a reference to a help phone number and (for some of the Advertisements) a website in the small written text, there is no other source presented to the consumer to obtain more information about the nature of the service and reconsider the contents of the Advertisements prior to sending the text message;
the duration of the Advertisements being insufficient to enable the viewer to listen to the voiceover and have regard to the strong visual images and then to consider the smaller written text. That is, the viewer is unable to do all of these things in a single viewing; and
the "visual clutter" on the screen, which makes it unlikely that the viewer of the Advertisements would notice or concentrate on the words in small print at the bottom of the screen.
72 As I have already indicated and in light of these factors, I do not accept that the existence of a double opt-in procedure means that the consumer was not relevantly misled. Before the confirmatory opt-in procedure, the consumer had made a decision to enter the quiz, purchase the ringtone, or purchase the game. The fact that the consumer did not ultimately suffer damage upon receiving the confirmatory text does not mean that that consumer was not misled in the first place. In order for the double opt-in procedure to operate, the misled person has taken action of a substantive nature, whether or not it ultimately caused significant detriment or financial loss. The double opt-in procedure did not necessarily provide a panacea for the consequences of a misunderstanding of the nature of the cost for obtaining the service, or indeed the fact that it was an ongoing service that was being obtained.
73 Global One and 6G point out that each of the Advertisements states explicitly in the written text at the bottom of the screen that the offer is not for those under 15 years of age. They say that the appeal of the Advertisements to children is a collateral consequence and not the intended consequence of the screening of the Advertisements. Global One and 6G point out that they have a complaints procedure in place and that if a child does sign up for a subscription and a complaint is made, an instant refund is given.
74 However, the information contained in the double opt-in message does not repeat the information that the subscriber must be 15+ or that the bill payer's permission is required. The evidence is that some under 18 year old consumers did pass through the double opt-in procedure and accept the subscription. The fact that, on complaint, the money was immediately refunded does not answer the fact that under 18 year olds were misled in the first place. The double opt-in procedure is not the answer, as asserted by Global One and 6G, to the problem of viewers responding to the Advertisements and subsequently obtaining services for which they did not intend to apply. This is made clear by the complaints from people, including those under 18 years of age, who passed through the double opt-in procedure and only then, presumably when they were billed, appreciated the extent of their financial commitment.
75 Global One and 6G rely on Knight v Beyond Properties Pty Ltd (2007) 242 ALR 586 where the Full Court said at [58] that, in characterising a course of conduct as misleading or deceptive, the practical consequences or impact which the conduct is likely to have must be taken into account so that, if the conduct only produces the effect of misleading a person for a transient period and to an insubstantial extent, it is not likely to be misleading or deceptive in any commercially significant sense.
76 However, as Global One and 6G accept, each case must be considered on its own facts and in context. While there is no evidence as to the economic consequences or impact on the viewers of the Advertisements, or indeed as to any disappointment that may have been suffered by a consumer who wished to obtain the ringtone or game and then declined to do so when he or she understood the cost, it is relevant that the consumer took a positive step as a result of the Advertisements. That is, he or she texted the required message to the premium service number.
77 Global One and 6G submit that there is no correlation between the present case and those where one of the effects of the advertising campaign was to draw the consumer into a sales process or to establish brand and product awareness generally, that is, to draw the consumer into a "marketing web". They say that the ephemeral nature of the Advertisements puts out of consideration a building of brand awareness or a predisposing of the consumer towards purchasing other products of Global One and 6G. It is true that there is not necessarily a "marketing web" in this case. The nature of the service being offered in the Advertisements means that, notwithstanding the reference to a help phone number and, for some of the Advertisements, a website in the small written text at the bottom of the screen, the only source of information available to the consumer before making the decision to send the text message was contained in the Advertisements themselves. That is, unlike the "marketing web" cases, there was no store for the consumer to visit, nor even any method of contact available to the consumer to find out more about the service. Given that the reasonable consumer would be unlikely to have written down the help number or the website in the written text in the time available during the screening of each of the Advertisements, this is not a factor that assists Global One and 6G.
78 Global One and 6G further submit that the reasonable consumer is a person interested in acquiring the service and that such a person will be interested in the cost. That person would, they say, then look to the Advertisements to find out explicitly what the cost is. He or she would then have ample time to read the writing in order to ascertain that fact and that would, in turn, tell the consumer about the subscription service. Global One and 6G submit that it is obvious that consumers could not reasonably have expected to receive the relevant content for nothing more than the cost of a text message. They point out that:
there can have been no contravention of s 53(e) of the Act, which relates to misrepresentations as to cost, when there is no identification of a one-off cost in the Advertisements;
the Commission does not identify what the cost in each of the Advertisements was represented to be;
because of the double-opt in procedure, the consumer would not receive or have to pay for the relevant content immediately upon texting the relevant number;
the reasonable consumer would expect to pay something for the ringtone or game;
at no point did the Advertisements state that there would be a one-off cost;
there was nothing whatsoever in the Advertisements which would allow the consumer to nominate a one-off cost; and
the consumer who wished to determine what the cost was would note the initial joining cost and ongoing subscription fee.
79 These submissions ignore other possible interpretations of the Advertisements, which include that:
the cost of entering the quiz or obtaining the ringtone or games was the cost of the text message. This is admittedly most plausible in relation to the cost of entering the quiz; or
if the consumer did consider what the cost would be, he or she would assume a reasonable cost for a one-off provision of a product or service - not that it was a subscription service with a sign-up fee and a daily or weekly fee that is not commensurate with the cost of the offered product or service alone.
80 Further, as the Commission points out, there is a likely class of people who are misled by the Advertisements but do not text the number and therefore do not receive the subscription request message. They are, therefore, not disabused of any misapprehension engendered by the Advertisements. There is no evidence as to the time lapse between the sending of an initial text and the subscription request message sent by Global One or 6G, so it is not clear for how long such a misapprehension continued. Further, the Advertisements do not prescribe a time limit for response.
81 I accept that, with the possible exception of the Quiz Advertisements, the viewers of the Advertisements would ordinarily have appreciated that the ringtones and games were not being provided for free. However, it is unlikely that they would have appreciated that, if they sent the SMS, the cost incurred was not simply a cost for the provision of the ringtone or game but a recurring cost, that cost being not just for the provision of that content but to sustain a subscription for that content and other services (cf Australian Competition and Consumer Commission v Teracomm Ltd [2009] FCA 903 at [23] per Moore J).
82 I accept that if the written text were read and understood by the consumer, there would be no relevant misrepresentation. The point is, however, that a consumer would be unlikely to read any of the text, let alone all of it, in the time of the Advertisements in circumstances where the size of the text was small and the consumer's attention would be focussed on the visual images and the voiceover. The inclusion of a written disclaimer does not dispel the effect of the voiceover and the general nature of the Advertisements, which convey a clear message that a one-off text will purchase the offered product or, in the case of the Quiz Advertisements, put the viewer in a position of being able to win the offered prize. A first time viewer is unlikely to have regard to the writing at all. A repeat viewer, or one that is more astute, would have sufficient time to read the writing, which is legible and capable of being read, but this would require concentration and a disregarding of all the other messages, both visual and aural, being conveyed by the Advertisements. That is unlikely unless the viewer's attention were directed to the written disclaimer. Such a viewer or one who was already aware of the possibility that more than the quiz/ringtone/game was being offered, or who was particularly astute, might read the writing and ignore the other messages. A reasonable viewer would not, in my view, do so.
83 Even if a particular consumer were aware and noticed the words "subscribe" or "subscription" in the Advertisements, a reasonable consumer in those circumstances would, in my view, still understand that he or she was paying for a specific product rather than for an ongoing subscription service for additional ringtones or games and other products. This is perhaps most clear in relation to the Quiz Advertisements. It is highly unlikely that a reasonable viewer would consider that the one-off chance of entering into a quiz would give rise to an open-ended subscription service. A person entering the quiz does not understand from the Quiz Advertisements that any opportunity is being offered other than that single opportunity to win the $100,000 prize. Further the Justin Bieber Advertisement makes no reference to a consumer receiving any ringtone other than Justin Bieber's song One Time, or any other service. The voiceover in the Doodle Jump Advertisement says 'subscribe to Doodle Jump, the mobile game'. It does not suggest that the consumer will receive any other product. The voiceover in the Space Invaders Advertisement states 'subscribe and get the world's most famous video game on your mobile'. It too does not suggest the consumer will receive any other product.
84 My observations at [79]-[83] apply to a consideration of ss 52, 53(aa), (c) and (e).
85 By reason of the observations that I have made in relation to each of the Advertisements, each is misleading and likely to mislead the viewer, which is in contravention of s 52.
86 The Advertisements represent that a consumer responding to the Advertisements by text message will be charged no more than a one-off cost for a single mobile phone ringtone, video game or quiz. The fact is that the consumer who does respond and who moves through the double opt-in procedure signs up to a subscription service and is then charged an initial subscription fee and a weekly or daily subscription fee which is not terminated until the consumer sends a subsequent SMS.
87 The representation in each of the Advertisements is that the price, although unstated, will only relate to the provision of one service when in fact the price relates to the provision of numerous services throughout the subscription. By reason of the observations that I have made in relation to each of the Advertisements, the making of this representation is false, or at the least misleading, and constitutes a contravention of s 53(e).
88 However, I am not satisfied that Global One and 6G have contravened ss 53(aa) and (c) of the Act. These subsections are not, in my view, applicable to the representation made in the Advertisements.