Prayer 1
61 As presently pleaded, paragraph 64 of the statement of claim is based on exemplifications of the Fake Celebrity Endorsement Advertisements which have been shown to users of the Facebook Platform in Australia and on which the applicants rely to allege that the respondents have contravened the Australian Consumer Law or the ASIC Act, or have been accessories to the alleged contraventions of Scam Advertisers.
62 Annexure A to the statement of claim provides an example of a Fake Celebrity Endorsement Ad and an example of a Deceptive Landing Page for the purposes of paragraph 64 of the statement of claim. The particulars to paragraph 64 state that "(f)urther examples are held by the Applicants and may be inspected by the Respondents by appointment". The particulars also provide a non-exhaustive list of persons said to be "public figures" who are "well known" in Australia.
63 The applicants seek to rely on all advertisements that meet the definition of Fake Celebrity Endorsement Ads in paragraph 63 of the statement of claim, which have been shown to users of the Facebook Platform in Australia, regardless of whether the precise advertisements are presently known to the parties or whether the advertisements were shown to users before or after the commencement of the proceeding. They do not wish to be confined to a case that there are only a given number of contravening advertisements.
64 Prior to 16 February 2024, the applicants identified some 600 examples of allegedly Fake Celebrity Endorsement Ads. These examples were provided to the respondents through schedules that gave certain information in relation to each advertisement. The applicants have now revised those schedules. In doing so, they have confined the examples to 234 advertisements.
65 In a letter dated 16 February 2024, the applicants' solicitors said:
We confirm that the Previous FCEA [Fake Celebrity Endorsement Ad] Examples which have not been identified in the FCEA Example Schedule (around 385) are no longer pressed as examples by the Applicants. Although the matter is only at the pleading stage, in the interests of efficient case management the Applicants have focused on the FCEAs for which there is the clearest evidence linking a FCEA to a Deceptive Landing Page. Further, in a small number of cases, upon further review and having regard to the matters raised by the Respondents, the Applicants have removed about 42 advertisements which did not as clearly fall within the definition of Fake Celebrity Endorsement Ad in paragraph 63 of the Amended Statement of Claim, and about six examples where the landing page did not clearly fall within the definition of Deceptive Landing Page, also in paragraph 63. There are also 22 of the Previous FCEA Examples which were removed because they are duplicates.
66 Nevertheless, the applicants' solicitors made clear that:
For the avoidance of doubt, the Applicants confirmed that the FCEAs and Deceptive Landing Pages specified in the FCEA Example Schedule are relied upon by the Applicants as examples only, and are not intended to constitute an exhaustive set of all advertisements and landing pages the subject of allegations in the Amended Statement of Claim.
67 By prayer 1(a) of the interlocutory application, the respondents seek an order that the statement of claim be amended to confine the alleged contraventions to specifically identified advertisements. They do not seek to limit the number of advertisements on which the applicants can rely. However, they do want to know the set of specific advertisements which are alleged to involve contraventions of the Australian Consumer Law or the ASIC Act. The respondents advance three principal submissions in support of this relief.
68 First, the respondents submit that the definition of Fake Celebrity Endorsement Ads in paragraph 63 is not sufficiently clear. Although the definition provides broadly expressed attributes of the impugned advertisements, the application of the definition calls for evaluative, and hence likely contestable, judgments about whether those attributes are present in a given advertisement. Who is to be taken as a "well-known public figure" in Australia? What is sufficient for an image of that person to be "featured"? When will a given advertisement be taken as deploying "clickbait"? When will a person be taken to have "endorsed" a particular scheme? When is a landing page to be taken as a "media article"?
69 The respondents argue that these, and other, similar questions loom large. They contend that, for the purposes of determining legal liability, it is one thing to be given an identifiable set of advertisements which are alleged to have the attributes referred to in paragraph 63 of the statement of claim. It is another thing to be given only the attributes and left to decide whether presently unidentified advertisements possess those attributes.
70 The respondents submit that this complaint is real, not theoretical. They contend that, among the (around) 600 examples originally provided by the applicants, a small number of the advertisements did not possess the attributes specified in paragraph 63 of the statement of claim, in that no particulars were provided of a landing page for the advertisement or of an image of the "well-known public figure". The respondents submit that, even so, the applicants advanced the claim that these were, nonetheless, Fake Celebrity Endorsement Ads for whose publication the respondents were liable.
71 Indeed, in their solicitors' letter of 16 February 2024, the applicants acknowledged that, previously, they had provided a number of examples of alleged Fake Celebrity Endorsement Ads that "did not as clearly fall within the definition" provided by paragraph 63. The applicants also acknowledged that, in the initially provided examples, there were a large number of advertisements which did not provide "the clearest evidence linking a FCEA to a Deceptive Landing Page", as well as examples "where the landing page did not clearly fall within the definition of Deceptive Landing Page". In oral argument, Senior Counsel for the respondents submitted that these apparent concessions show that "clear judgments cannot be made about whether an unidentified ad is part of these proceedings or not".
72 Secondly, the respondents submit that the applicants' "definitional approach" without reference to an identified set of advertisements is, beyond the 234 examples provided in the schedule to the 16 February 2024 letter, inadequate to enable them to meet a case that either they or Scam Advertisers made the particular representations alleged in paragraphs 115 to 123 of the statement of claim or that the Meta Advertising Conduct was liable to mislead or deceive users in the particular respects alleged in paragraphs 112 to 114 of the statement of claim. They contend that whether an advertisement makes the alleged representations or has the misleading or deceptive character that is pleaded depends on both context and the content of the advertisement itself.
73 The respondents point to other paragraphs of the statement of claim that create similar difficulties for their defence of the allegations that are made against them. As the respondents put it, the applicants need to identify specific advertisements - not simply unidentified advertisements allegedly having the general attributes pleaded in paragraph 63 of the statement of claim - to enable them to know the case that is brought against them. The respondents contend that, despite paragraph 63 of the statement of claim, the structure of the applicants' case is, as a matter of substance, "ad specific".
74 Thirdly, the respondents submit that the applicants "definitional approach" deprives them of the opportunity of properly raising the defence provided in s 251(2) of the Australia Consumer Law:
251 Publication of advertisement in the ordinary course of business
…
(2) In the proceeding, it is a defence if the defendant proves that:
(a) the defendant is a person whose business it is to publish or arrange for the publication of advertisements; and
(b) the defendant received the advertisement for publication in the ordinary course of business; and
(c) the defendant did not know, and had no reason to suspect, that its publication would amount to a contravention of such a provision.
75 The respondents place emphasis on the proof, in a given case, of para (c) of this provision and how the predecessor provision of s 251 (s 85(3) of the Trade Practices Act 1974 (Cth) (the Trade Practices Act)) has been applied in relation to that element.
76 In Australian Competition and Consumer Commission v Trading Post Australia Pty Ltd [2011] FCA 1086; 197 FCR 498 (Trading Post), when dealing with the defence under s 85(3) of the Trade Practices Act, Nicholas J adopted the approach of Franki J (with whom Bowen CJ generally agreed) in Universal Telecasters (Qld) v Guthrie [1978] FCA 18; 32 FLR 360 (Guthrie).
77 In Guthrie, Franki J reasoned (at 379):
What is necessary under this defence is not a setting-up and policing of a system, but in relation to a particular advertisement, that he did not know and had no reason to suspect that its publication would amount to a contravention of a provision of Pt V.
78 In Trading Post, Nicholas J said (at [204]):
204 Section 85(3), as interpreted by Franki J is not concerned, at least not directly, with the steps which a defendant might have taken to avoid the contravention. Rather, it calls for a consideration of whether the defendant knew or had reason to suspect that publication of the advertisement might give rise to the contravention.
79 The respondents submit that this approach applies equally to the defence under s 251(2) of the Australian Consumer Law. They contend that it will not be sufficient for them merely to prove that they had systems in place to avoid the publication of contravening advertisements. They contend that, as a legal requirement, they must go further and plead their knowledge concerning the publication of each advertisement said to involve, or to have been involved in, the alleged contraventions. They submit that they cannot do this in relation to an unidentified advertisement which is merely alleged to have the attributes pleaded in paragraph 63 of the statement of claim.
80 The applicants emphasise that their case is about "a systematic problem occurring on the Facebook Platform" and that the case must be viewed through that lens. They submit that if they are confined to the 234 examples they have provided, then "what is a fundamental systemic problem in the Facebook Platform looks as though it were a small aberration". They contend that the evidence will show that a well-known scam is being perpetrated and that the respondents have long been aware of that scam.
81 The applicants seek to differentiate this case from a "traditional advertising case". They submit that the case is:
… a new type of advertising which is really high volume, really ephemeral, where the advertisers themselves are assisted in various ways by the publisher to create their ads and then target those ads to the users predicted to be most likely to interact with the ads.
82 The applicants submit, further, that their pleading of a class of advertisements (i.e., Fake Celebrity Endorsement Ads) that link to Deceptive Landing Pages is clear and fully particularised. They dispute that the respondents do not know the case they have to meet.
83 In the course of oral submissions, the applicants submitted that the explanation provided in the letter of 16 February 2024 for reducing the number of examples does not suggest that there was "some great confusion" about the definition in paragraph 63 of the statement of claim. The applicants also made clear that they regard the examples that they have provided as merely "illustrative" of the pattern of conduct which they allege and that these examples are simply part of a much larger corpus of contravening conduct which the Court will be invited to infer has taken place and will take place.
84 With regard to the defence under s 251(2) of the Australian Consumer Law, the applicants submit that a defendant's knowledge, sufficient to raise the defence, can be pleaded at a higher level of generality than the respondents contend. The applicants submit that the "key point" that emerges from the authorities is that "knowledge of a system or type of conduct is enough to fix a defendant with knowledge for the purposes of accessorial liability".
85 In this regard, the applicants took me to statements in a number of cases in this Court dealing with the attribution of accessorial liability: EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134; 360 ALR 261 at [34]; Australian Communications and Media Authority v Mobilegate Ltd A Company Incorporated in Hong Kong (No 8) [2010] FCA 1197; 275 ALR 293 at [160] and [172]; 85 Degrees Coffee Australia Pty Ltd v Fair Work Inspector Rodwell [2020] FCA 1190; 299 IR 280 at [44]; Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 4) [2021] FCA 1242 at [780]; Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Limited (No 5) [2021] FCA 1345; 394 ALR 403 at [174]. The applicants also took me to Bruce v Williams (1989) 10 MVR 451 at 457 - 458 and Director of Public Prosecutions for Northern Ireland v Maxwell [1978] 3 All ER 1140 at 1145.
86 The purpose of referring to these cases was to advance the proposition that the principles concerning the attribution of accessorial liability inform the application of the publisher's defence under s 251(2) of the Australian Consumer Law. In accordance with those principles, the applicants contend that the respondents will not be able to avail themselves of the defence under s 251(2) because, given the evidence on which the applicants propose to rely, the respondents:
… will not be able to prove that they did not have knowledge of these ads. They might not have seen the particular advertisement but they were certainly aware of the class of advertisements of which the particular one was a member.
87 In other words, according to the applicants: (a) the respondents cannot avoid accessorial liability because, as a matter of fact, the respondents know that there is a class of advertisement where Scam Advertisers are making the alleged representations; and (b) knowledge of that fact also precludes the respondents from successfully contending that they did not know, and had no reason to suspect, that publication of a particular advertisement on the Facebook Platform in Australia, with the attributes pleaded in paragraph 63 of the statement of claim, would amount to a contravention of the provisions of the Australian Consumer Law on which the applicants rely.