Telstra Corporation Ltd v Singtel Optus Pty Ltd [2014] VSC 35

2 The plaintiff, Telstra Corporation Ltd ("Telstra"), moved the court on 7 February 2014 for interlocutory relief preventing any further broadcasting of the Advertisement. Upon Optus providing certain undertakings to the court,[1] and upon Telstra giving the usual undertaking as to damages, no interlocutory relief was granted and the matter was set down for trial on 12 February 2014.

3 At the end of the hearing on 12 February 2014, both parties extended their respective undertakings to the court.

4 Telstra seeks, by way of final relief, orders preventing any further broadcasting of the Advertisement, together with orders to remedy what is said to be the effect of the Advertisement. Argument as to any appropriate orders that might be made has been deferred until the determination of the primary issues in the case.

5 Both Telstra and Optus own and operate digital mobile networks within Australia. The mobile networks are the means by which signals from 3G (3rd generation) and 4G (4th generation) mobile telephone technology is transmitted.[2] The respective mobile networks have different levels of coverage throughout Australia. Coverage may be measured in various ways. These include by reference to the number of people within Australia who can be reached by a signal where they reside or are usually located, thereby allowing them to use the network (known as "Population Coverage"), or by reference to the extent that the land mass of Australia is reached by a signal (known as "Geographic Coverage").[3]

6 The Advertisement, in part, is directed towards the issue of coverage of Telstra's mobile network and Optus' mobile network. The dominant message conveyed by the Advertisement in this regard is misleading.

7 The Advertisement contains both visual and audio content. At the commencement, there is an image which consists of 3 features, namely: a rough map of Australia with a dotted coastline around the mainland and Tasmania ("the Map"); a switch with a handle; and an animated character. Shortly after this image is displayed, a voice proceeds to state the following:

When it comes to the percentage of Australians the Optus mobile network reaches, there isn't much difference between us and Telstra. In fact, it's less than 1%.

8 While this is being said, the image changes. As the word "Australians" is stated, "OPTUS 98.5%" is introduced to the image. This appears within the main boundary on the western side of the Map. As this is occurring, the animated character draws the attention of the audience to the Map. It does this by initially looking at the Map (as the word "When" is said[4]) and then pointing to the Map (as the word "the", immediately after the word "Australians", is said[5]). The image remains in that state until the word "between" is stated. At that point in time, the image changes to introduce "TELSTRA 99.3%". This is introduced within the main boundary on the eastern side of the Map. Immediately below is a depiction of the image at the time the word "between" is said.

9 As may be seen, the image includes some words at the bottom of it. Those words are introduced at the same time as "Telstra 99.3%" is introduced. They are in reasonably small print. Neither party suggested that particular reference ought to be made to these words for the purposes of establishing whether or not the Advertisement was misleading or deceptive. With respect, this approach is plainly correct. (For what it is worth, when I saw the Advertisement for the first time, I did not notice these words were displayed.[6])

10 Upon the words "In fact" being stated, the image changes again. The animated character pulls the handle on the switch and the words and figures inside the Map change to "LESS THAN 1%". Simultaneously, each of the 2 boundaries around the Australian mainland and Tasmania transform into a continuous line and are brightly illuminated. The impression of flashing lights is given, and the boundaries flash on 4 separate occasions (on each occasion transforming from dots to continuous lines) while the voiceover continues. At the time the impression of flashing lights appears, a sound is made similar to the sound of a fluorescent light flashing (though not at a level to affect the audibility of the voiceover). Immediately below is a depiction of the image: (1) at the point in time this image is introduced; and (2) when it is not illuminated.

11 The Advertisement then moves to further images which do not involve the Map, or any representation about the percentage of Australians reached by the mobile networks of Optus or Telstra, or any comparison between the 2 mobile networks.

12 As the court is required to consider the Advertisement as a whole,[7] I will continue with a description of the Advertisement.

13 The next image and the voiceover together refer to an offer in relation to a Samsung telephone and a plan with a minimum cost of $840 over 24 months. Subsequent to this plan, a further plan involving a Samsung telephone is introduced visually and orally. This further plan has a minimum cost of $960 over 24 months. Finally, the Advertisement refers to "an awesome deal on an awesome network" and invites the viewer to "make the switch" to a plan referred to as "Optus My Plan". The last image displayed refers to a website address and records that the offers the subject of the Advertisement end on 28 February 2014.[8]

14 The voiceover is backed with soft-playing music. The voice is a reasonably monotone style, clearly articulated, with, at most, marginal emphasis on some of the words used. The voice is neither loud nor soft. The pace of the words spoken is generally consistent throughout; it would not aptly be described as quick or slow. Senior counsel for Optus described the oral content of the Advertisement as being presented in a "natural Australian conversational style". I agree.

15 In summary, the voiceover does not focus substantially or significantly on a part or parts of the Advertisement more prominently than another part or other parts of the Advertisement.

16 Telstra alleges that the following representations are made by the Advertisement:

(1) The Optus mobile network and the Telstra mobile network cover 98.5% and 99.3% of the Australian land mass respectively ("the First Representation").

(2) The Geographic Coverage of the Telstra mobile network is less than 1% greater than the Geographic Coverage of the Optus mobile network ("the Second Representation").

(3) The difference between the coverage (alternatively the Geographic Coverage) of the Telstra mobile network and that of the Optus mobile network is minimal and insignificant ("the Third Representation").

17 In relation to the Third Representation, Telstra submitted that "coverage" as pleaded should be understood to encompass the "generic meaning" of coverage, which includes both Population Coverage and Geographic Coverage.[9]

18 Each of the Representations was alleged to be made by Optus in trade or commerce and to be "false, misleading and/or deceptive". Essentially, Telstra alleges the Representations substantially misrepresent Optus' Geographic Coverage (together with Telstra's Geographic Coverage) and the comparative coverage of the 2 mobile networks.

19 Telstra led no evidence to seek to prove that any Australian consumer actually had been misled or deceived by the Advertisement. In oral submissions, senior counsel for Telstra stated that Telstra also sought to establish that Representations were likely to mislead or deceive. The case proceeded on this basis, although this alternative was not expressly pleaded.

20 Telstra identified the target audience or class of persons to whom the Advertisement is directed as members of the Australian public who are considering acquiring a mobile telephone service or considering changing the carrier who supplies the existing service ("the Class"). Optus took no issue with this approach. It is plain the persons to whom the Advertisement is directed would include at least those persons referred to by Telstra. I will proceed on this basis.[10] Self-evidently, given the prevalence of mobile telephone users in the community, the Class would cover a large cross-section of the Australian population.[11]

21 Telstra submitted that an ordinary or reasonable person within the Class "knows something about mobile telephones, makes and receives calls, knows that calls 'drop out' from time to time and knows that coverage is an important matter".[12]

22 Telstra led unchallenged evidence that Telstra has no way of knowing why any of its customers "switch" to another provider, such as Optus. This evidence included the fact that it is very difficult to assess the effect particular advertisements have on consumer behaviour.

23 The relevant market is dominated by post-paid, fixed term contracts, often 12 or 24 months in duration. Approximately 75 per cent of Telstra's mobile telephone users in Australia are contracted to Telstra in this way. As a result of these arrangements, including additional payments a customer must make if she or he terminates the contract before the expiry of the fixed term, customers intending to change providers often wait until the end of a contract before switching. This is one of the factors which makes it difficult to assess why a customer leaves a provider.

24 One matter Telstra is able to establish is that coverage is an important consideration for a customer when she or he is deciding which provider to engage. The evidence, again uncontested and based on market research conducted from July to September 2013, demonstrates that the most important factor in customers deciding to switch to Telstra from another network was the network coverage of Telstra. Of those surveyed, 71 per cent gave this factor as the reason for changing. Although not as significant, network coverage was also an important factor for first-time customers and existing customers of Telstra.[13]

25 Telstra alleges contraventions of the Australian Consumer Law contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth). They contend that the following provisions have been contravened:

18(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

29(1) A person must not, in trade or commerce, in connection with supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

...

(b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or

...

(g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or

...

26 Telstra further alleges that by reason of the alleged contraventions, Telstra has suffered loss and damage. It is not necessary to set out the particulars of loss alleged as the trial was only concerned with the issue of the proper characterisation of the conduct comprising the Advertisement.

27 Optus denies that the Representations were made. It emphasises the words "Australians" and "reaches" in the phrase "percentage of Australians the Optus mobile network reaches" in the voiceover at the start of the Advertisement. Optus also focussed on the fact that these words appeared at the start of the Advertisement, which, it submits, set the meaning for the message being delivered. It submits the words were not spoken quickly so as to diminish their impact and, given the emphasis on "Australians" rather than "Australia", the natural and ordinary meaning of the Advertisement, when viewed as a whole, is that the representations concerning coverage are directed towards Population Coverage and not Geographic Coverage.

28 Further, Optus submits that, if the Advertisement is properly understood as making representations only concerning Population Coverage as Optus contends, it is factually correct, and therefore is not false, misleading or deceptive or likely to mislead or deceive.

29 There was no real controversy between the parties as to the relevant principles. As recently as December 2013, the High Court of Australia, in Australian Competition and Consumer Commission v TPG Internet Pty Ltd,[14] considered this area of the law in relation to television advertising.

30 Before considering television advertising specifically, it is useful to record the general approach to be taken in determining whether conduct is misleading or deceptive in the context of a communication published to the public at large. Where no evidence has been led from any consumer, the general approach to be taken in relation to cases concerning allegations of false, misleading or deceptive conduct in trade or commerce is as follows:

(1) Consider whether each of the pleaded representations is conveyed by the conduct referred to.[15]

(2) If yes to (1), was the making of each such representation conduct that was misleading or deceptive or likely to mislead or deceive (s 18), or false or misleading: s 29?

In determining (1) and (2), the following must be included in the court's deliberations:

(3) Identify the class or classes of consumers likely to be affected by the conduct.[16] The class or classes may be confined by factors such as time and geographical circulation of the representations.[17]

(4) After identifying the relevant class or classes, consider who comes within the class or classes. "This may include the astute and the gullible, the intelligent and the not so intelligent, the well educated and the poorly educated."[18]

(5) Having determined the question in (4), the hypothetical person identified within each class should be judged as "ordinary" or "reasonable", and postulated understandings or reactions that are "extreme" or "fanciful" should be excluded.[19]

(6) The individual events comprising the conduct of the making of each representation are not to be considered in isolation, but in characterising the conduct those events are generally to be considered as a whole.[20]

In relation to question (2), the answer will be in the affirmative if the conduct "has a tendency to lead into error".[21]

31 In the context of television advertisements, the following observations may be made in light of the majority judgment of the High Court in Australian Competition and Consumer Commission v TPG Internet Pty Ltd:[22]

(1) Though the attention of a viewer might be "arrested" by the contents of a television advertisement, such a viewer cannot be expected to pay close attention to the contents of the advertisement; and "certainly not the attention focussed on viewing and listening to the advertisements by the judges obliged to scrutinise them" in legal proceedings.[23]

(2) An advertisement may convey a misleading representation where "the target audience might be disposed ... to attend closely to some words of the advertisement and ignore the balance".[24] This observation concerning words in an advertisement is equally applicable to images broadcast in a television advertisement. An example where this may occur is where an advertisement selects some words or images "for emphasis and relegate[s] the balance to relative obscurity".[25]

(3) "[C]onsumers might absorb only the general thrust or dominant message" of an advertisement not because "of selective attention or an unexpected want of sceptical vigilance", but as "an unremarkable consequence" of the contents of the advertisement.[26]

32 Relevant observations in the same vein as the 3 propositions set out in the preceding paragraph were made in Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 3).[27] These observations cover the various aspects of the state of a viewer to be borne in mind when considering the understanding of a viewer of a television commercial. In a case concerning publications in newspapers, the internet, flyers and billboards, as well as television advertising, Perram J said the following:[28]

Where television commercials are concerned there needs to be a recognition of the frequently low attention devoted by consumers to them and their essentially transient nature. ("[The advertisements] will be seen by the casual but not overly attentive viewer viewing a free-to-air program with only a marginal interest in the advertisements shown between the segments of the program ..."): There will be some consumers who will not be watching television live and will fast-forward through all of the commercials. Among those who do not take that course there will be many who are not paying especially close attention to what is happening. This is not to say that television commercials are not very effective in their own way but rather to underscore that they may not be ideal for the delivery of complicated information. One may well establish brand awareness using a constant diet of brand references or striking images but the delivery to consumers of detailed information requiring cognition is unlikely to be effective: people watching television commercials are rarely in a contemplative or thinking mood.

(Emphasis added; citations omitted.)

In short, although there is a range of responses within a class of persons to whom a television advertisement is directed, in determining how an advertisement would be understood, a court cannot assume an ordinary or reasonable person in such a class would carefully study and consider the contents of a television advertisement.

33 Finally, to quote directly from the majority judgment in Australian Competition and Consumer Commission v TPG Internet Pty Ltd:[29]

[W]here a representation is made in terms apt to create a particular mental impression in the representee, and is intended to do so, it may properly be inferred that it has that effect. Such an inference may be drawn more readily where the business of the representor is to make such representations and where the representor's business benefits from creating such an impression.

(Citations omitted.)

34 Paragraphs 31 and 32 above are concerned with television advertisements. These observations cannot simply be transposed and applied in relation to advertisements placed on a website. At least 1 clear distinction between a member of the Class viewing the Advertisement by this means rather than on television is that that person has directed herself or himself to the website voluntarily and proactively (presumably deliberately, but in some instances perhaps inadvertently), rather than having the Advertisement imposed upon her or him during a break in a television program.[30]

35 No submissions were made by either party directed to this distinction. Whatever the different approach might be in assessing the level of attention and cognition in relation to internet advertising, it was accepted that if the Advertisement contravened the Australian Consumer Law by reason of broadcasting on the television, it would also contravene the Australian Consumer Law by publication on the internet.

36 The court must consider the Advertisement "against the background of all surrounding circumstances".[31] The principal circumstances surrounding the broadcast of the Advertisement are not in issue. Broadly speaking, the Population Coverage of the respective mobile networks of Telstra and Optus is similar. Telstra reaches approximately 99.3 per cent of Australia's population, whereas Optus reaches approximately 98.5 per cent.

37 In contrast to Population Coverage, the Geographic Coverage of the respective mobile networks is markedly different. As at 6 February 2014, Telstra covered 2.356 million square kilometres of the Australian land mass. In contrast, the mobile network of Optus as at 6 February 2014 covered approximately 970,000 square kilometres (ie only approximately 41 per cent of Telstra's). I was informed by the parties that 2.356 million square kilometres represented approximately 28 per cent of the Australian land mass.[32]

38 The sizable difference between the percentages pertaining to Population Coverage and the percentages related to Geographical Coverage is attributable to the well known fact that Australian society is highly urbanised.

39 Telstra alleges that the difference in Geographic Coverage is material and substantial. Although this was not expressly addressed in Optus' defence, there could be no issue that the Geographic Coverage of the 2 networks is materially and substantially different.

40 The Advertisement was first broadcast on or about 29 January 2014.[33] The Advertisement has been broadcast on in excess of 50 free-to-air television channels in, from north to south, Brisbane, Perth, Sydney, Adelaide and Melbourne. The Advertisement has been broadcast at least 133 times on free-to-air television.

41 On 30 January 2014, the Advertisement was also placed on a Youtube channel website.[34] The Advertisement appeared on this website from 30 January 2014 until approximately 7 February 2014, when it was removed pursuant to an undertaking given by Optus to this court.[35]

42 The issues in this case do not raise any questions about the strength of any signal from the respective mobile networks.

G. The Advertisement contravenes the Australian Consumer Law

43 The Advertisement is of a kind that contains a dominant message in relation to a topic, namely Geographic Coverage, as an unremarkable consequence of the contents of the Advertisement.[36] When viewed as a whole, the Advertisement would be understood by an ordinary or reasonable person in the Class to represent, amongst other things, each of the Representations.

44 In relation to the First Representation, there are a number of separate instances when the First Representation is made. When these instances are viewed individually and collectively, the conduct clearly conveys the First Representation. That is, the message or impression given is that the figures referred to in relation to "reach" relate to Geographic Coverage, rather than Population Coverage.

(1) The insertion of "OPTUS 98.5%" within the boundaries of mainland Australia, in the context as described in paragraph 8 above.

(2) The insertion of "TELSTRA 99.3%", alongside "OPTUS 98.5%" within the boundaries of mainland Australia, in the context as described in paragraph 8 above.

(3) The replacement of "OPTUS 98.5% TELSTRA 99.3%" with "LESS THAN 1%" in the circumstances referred to in paragraph 10 above.

46 On each of these occasions, and when viewed collectively, taking into account the contents of the Advertisement as a whole, the dominant message conveyed is that the figures of 98.5 per cent and 99.3 per cent have a relationship with coverage concerning the width and breadth of Australia, within the boundaries of Australia as depicted on the Map.

47 Although not strictly necessary, there are further observations that may be made which fortify the view as to how the Advertisement would be understood, by an ordinary or reasonable member of the Class, to include a representation in terms of the First Representation.

48 First, there is nothing in any of the images displayed to suggest that the figures are concerned with Population Coverage, as opposed to Geographic Coverage.

49 In this regard, the reference to "Australians" in the voiceover does not "cure" the misleading message. In my view, the use of the word "Australians" would have minimal impact on the dominant message being conveyed to an ordinary or reasonable person in the Class. Although I do not accept the submission put on behalf of Telstra that the voiceover was quickly spoken in this part of the Advertisement, the contents of the voiceover, such as they are, do not clearly and specifically address Population Coverage. Indeed, if the word "Australians" were replaced with the word "Australia", then the voiceover would fortify the misleading message of the visual images. It is unlikely that an ordinary or reasonable member of the Class would pick up on such a subtle distinction when she or he heard the word "Australians" in the context of a television advertisement such as this.

50 In any event, even if members within the Class were to be conscious of the word "Australians" being used, in my view it is highly unlikely such awareness would alter the understanding of the overwhelming dominant message of the Advertisement that the figures are concerned with Geographic Coverage.

51 Secondly, there is nothing in the Advertisement which refers in any way to the true position in relation to Geographic Coverage in relation to either Optus or Telstra.

52 Thirdly, the message that Optus says it seeks to convey in relation to Population Coverage could have readily been conveyed without the use of a map of Australia (as had been done in the Previous Advertisement: see paragraph 75 below). It must be assumed that Optus made a conscious decision to include the Map, and to insert the figures referable to Optus and Telstra inside the Map, in the way that Optus did, to achieve a particular purpose. The same may be said in relation to the simulated flashing lighting at the boundaries, together with the accompanying sound of flashing lighting.

53 In short, I accept the submission made on behalf of Telstra that these aspects of the Advertisement were part of a deliberate advertising strategy that was calculated to benefit Optus' business.[37] In these circumstances, the authorities[38] establish that it may properly and more readily be inferred that the Advertisement has the effect intended.

54 The Second Representation is really no more than an extension of the First Representation, save that it introduces a comparison between the mobile networks. Nothing further needs to be said beyond what has been said in relation to the First Representation.[39]

55 As may be seen from paragraph 16(3) above, the Third Representation seeks to go beyond the First Representation and the Second Representation in 2 respects. The Third Representation is not confined to Geographic Coverage, but refers to coverage generally.[40] Further, the Third Representation refers to the comparative positions in the Advertisement between the Telstra mobile network and the Optus mobile network not in absolute percentage terms, but rather more general relative terms.

56 Put succinctly, the pleading of the Third Representation invites the court to consider whether an ordinary or reasonable person in the Class would, in the context of viewing the Advertisement as a whole, understand the message being conveyed is that there is comparatively minimal difference between the 2 mobile networks.

57 When first pleaded, this allegation was confined to a comparison of Geographic Coverage. Consistent with the findings made in relation to the First Representation and the Second Representation, the Advertisement does make a representation to the effect that the difference in Geographic Coverage is minimal and insignificant, being less than 1%. To the extent that this allegation is 1 of the alternative bases of making out the Third Representation, Telstra has established this part of its case.

58 In those circumstances, it is not necessary for the court to consider the other basis of alleging the Third Representation, namely by reference to "generic coverage"[41] (as opposed to Geographic Coverage). Indeed, the matter is pleaded strictly in the alternative.

59 If I were required to make a finding in relation to the "generic coverage", it may have been a difficult exercise. The allegation invites the court to find that the ordinary or reasonable person in the Class would turn her or his mind to something beyond Geographic Coverage, notwithstanding the relevant parts of the Advertisement are directed towards Geographic Coverage. In circumstances where the court is considering the position of someone who is not inclined to digest detailed information requiring meaningful cognition or any contemplative exercise, this alternate allegation may have been problematic. In any event, I say nothing further as this issue does not arise.

60 For completeness, I can see no proper basis for suggesting that the Advertisement published on the Optus website would convey a different message to the dominant message conveyed by the television broadcasting of the Advertisement. If I had been invited to consider the website publication separately, I would have arrived at the same conclusion. Similarly, if an ordinary or reasonable person in the Class were to view the Advertisement more than once, it is highly unlikely that the dominant message would be understood any differently.

G.2 The Representations were misleading or deceptive, or likely to mislead or deceive, or false or misleading

G.2.1 Section 18 of the Australian Consumer Law

61 Having found the Representations were made as pleaded, it follows that each of the Representations was misleading or deceptive, or likely to mislead or deceive.

62 In relation to the First Representation and the Second Representation, the figures of 99.3 per cent in relation to Telstra and 98.5 per cent in relation to Optus bear no resemblance to the actual Geographic Coverage of the respective networks. Moreover, the difference in Geographic Coverage between the 2 networks is far greater than 1 per cent. As may be seen in paragraph 37 above, Telstra's mobile network covers an area nearly 2½ times greater in land mass than the mobile network of Optus.

63 In relation to the Third Representation, the difference between the Geographic Coverage of the 2 networks is not minimal and insignificant. By reason of the substantial difference in the Geographic Coverage, the Third Representation, as found above, is plainly misleading or deceptive.

G.2.2 Section 29(1)(b) and (g) of the Australian Consumer Law

64 Optus did not make any submissions materially distinguishing the position under paragraphs (b) and (g) of s 29(1) from that pertaining under s 18. In my view, this approach was undoubtedly the proper one.

65 The findings in relation to the Representations, to the effect that Optus engaged in misleading or deceptive conduct, or conduct that is likely to mislead or deceive, also establish that the causes of action pleaded under s 29(1)(b) and (g) are necessarily proven.

66 To be more specific, the making of each of the Representations amounted to a false or misleading statement in trade or commerce that the services offered by Optus on its mobile network are of a particular standard, quality or grade (paragraph (b)) or have performance characteristics, uses or benefits they do not have (paragraph (g)), namely:

(1) Possessing a Geographic Coverage of 98.5 per cent (which bears no resemblance to the actual Geographic Coverage of the Optus mobile network).

(2) Possessing a Geographic Coverage that is less than 1 per cent smaller than the Geographic Coverage offered by Telstra's mobile network (when the Geographic Coverage between the 2 networks is materially and substantially different).

67 I have already addressed a number of the submissions made by Optus in finding that the Advertisement contravened the Australian Consumer Law. However, there were further submissions made that should be addressed specifically.

G.3.1 Knowledge of the Class concerning coverage

68 Optus contended that any ordinary or reasonable person within the Class would know that the representations made concerning 98.5 per cent and 99.3 per cent coverage could not possibly relate to Geographic Coverage. It was contended that persons who use mobile telephones know that coverage throughout Australia does not reach anywhere near such proportions. No evidence was led on this issue.

69 In my view, there are a number of difficulties with this submission.

70 First, I am far from convinced that people would know what proportion of Australia would be covered by the respective mobile networks.

71 I accept Optus' submission that the ordinary or reasonable person in the Class is likely to know large parts of Australia are unpopulated and consist of deserts, mountains and other terrain that is not readily accessible to Australians living in cities and towns. Also, it was common ground that from time to time mobile telephone users are unable to get a signal when they travel outside (or, occasionally, even inside) the major cities and towns. However, I seriously doubt whether an ordinary or reasonable person in the Class, possessing such knowledge and encountering such experiences, would ordinarily turn their minds as to what percentage of the entire Australian land mass would be without any coverage.

72 Secondly, even if I am wrong in relation to what is said immediately above, I do not accept that knowledge and previous experiences people have had in the past would come to mind when viewing the Advertisement. More and more, people in the Australian community are becoming accustomed to substantial advances being made in technology, including mobile telephone technology.[42] In those circumstances, an ordinary or reasonable person in the Class would be likely to accept the Representations at face value, without injecting any understanding of her or his own in order to alter the understanding of the Representations that would otherwise exist.

73 Thirdly, the Advertisement appears on television. This submission from Optus requires a level of analysis and sophistication not readily attributable to this means of communication.

74 Fourthly, the representation is being made by Optus itself. An ordinary or reasonable person in the Class would expect Optus to be able to give an accurate account of the Geographic Coverage that it possessed.[43] This observation is equally applicable in relation to Optus making representations regarding its principal competitor.

75 Optus also sought to rely upon an earlier advertisement of Optus in which the voiceover was identical in relation to the extent of the reach of the Optus mobile network and the Telstra mobile network ("the Previous Advertisement").[44] The critically distinguishing feature of the Previous Advertisement for present purposes is that it did not display a map of Australia at any time during the course of its presentation.

76 Optus contended that the publication of the Previous Advertisement was relevant to the question of how an ordinary or reasonable person in the Class would understand the contents of the Advertisement. In my view, consideration of the Previous Advertisement is of little, if any, relevance to determining whether or not the Advertisement contravenes the Australian Consumer Law. There are at least 4 reasons for this.

77 First, it is a question of fact as to whether an earlier advertisement is likely to affect the understanding of a consumer at the time of the relevant advertisement in question. Although this is clearly possible in some advertising campaigns, in many cases it is unlikely to be the position.[45] In other words, a court cannot automatically assume that because something has been stated in any earlier advertisement dealing with the same or similar subject matter, that that earlier statement will exercise the mind, or affect the understanding, of an audience member when she or he views the later advertisement.

78 Secondly, there is nothing in the Previous Advertisement which suggests that its contents are specifically concerned with Geographic Coverage. In these circumstances, Optus submitted an ordinary or reasonable person in the Class would understand the common language used in both the Previous Advertisement and the Advertisement to be a reference to Population Coverage. In my view, it is a quantum leap to suggest that when the Advertisement's dominant message relates to Geographic Coverage, an ordinary or reasonable person in the Class would turn her or his mind back to the Previous Advertisement to effectively correct the dominant message being given by the Advertisement.

79 Thirdly, the dominant message in the Advertisement is delivered by the visual images rather than the voiceover. In those circumstances, a previous voiceover using the same words is of little moment. This is particularly so in light of the observations I have made in relation to the voiceover.[46]

80 Fourthly, there is no evidence before the court as to how often and on what television networks the Previous Advertisement was broadcast. The only evidence as to the broadcasting of the Previous Advertisement was that it was during December 2013. Put simply, there is no proper evidentiary basis for concluding that a person in the Class would have been "conditioned" by the Previous Advertisement.

81 Finally, for completeness on this issue, I do not accept the submission made by Telstra that the Previous Advertisement was clearly distinguishable because of the depiction of a bar graph to compare Telstra and Optus. That part of the Previous Advertisement goes to a completely different subject matter and seems to bear no relevance to the questions at hand.

82 Optus relied upon 11 publications previously made by Telstra in relation to Population Coverage, most of which also refer to Geographic Coverage. Schedule A to this judgment contains a table setting out the relevant aspects of each publication.

83 Optus submitted that consumers had been "conditioned" to understand a reference to percentages, in terms of the reach of the coverage of a mobile network, as a reference to Population Coverage, rather than Geographic Coverage. Optus emphasised that in all Telstra's publications concerning coverage it referred to Population Coverage in percentage terms, but only referred to Geographic Coverage in terms of area in square kilometres. Optus also focussed on the fact that Telstra had previously used a map of Australia when publishing information concerning Population Coverage.

84 Optus made particular reference to a Telstra promotion of its 4G network on Youtube ("the Telstra Youtube Promotion"), which uses a map of Australia.[47] The Telstra Youtube Promotion does not refer to Geographic Coverage.

85 In my view, this evidence is of marginal, if any, relevance. The reasons for this include:

(1) The Telstra Youtube Promotion is broadcast on the internet rather than on a television network.

(2) Although a map of Australia is used, the Telstra Youtube Promotion says Telstra's Geographic Coverage is more than 4 times the other networks, without representing what the coverage of Telstra's network or any other network actually is.

(3) The introduction of the map of Australia in the Telstra Youtube Promotion is at a time when coverage is discussed and includes the following words both visually and orally:

Telstra offers 4G in all capital CBDs, many surrounding suburban areas and selected regional areas and our fastest available 3G in other coverage areas.

There is no representation as to the extent of the Geographical Coverage beyond this. Further, in my view, the words used do not suggest a large percentage of the land mass of Australia is covered.

(4) Shortly after what is referred to in (3) above, the following is stated, both visually and orally:

Telstra 4G currently reaches 85% of the Australian population.

(Emphasis added.)

86 Optus did not place particular emphasis on the contents of the remaining 10 publications. The court was invited to read through these publications to obtain a proper understanding of how Population Coverage and Geographic Coverage have been dealt with in the past by Telstra.

87 Having reviewed the materials, I note that only 3 of the publications (including the Telstra Youtube Promotion) include a map of Australia. Further, it is difficult to see how these publications, by means other than television,[48] might be said to affect the understanding of an ordinary or reasonable viewer, in particular in the absence of any evidence to that effect. Furthermore, there is no evidence before the court as to how often, and by whom, these publications have been viewed. Put bluntly, it is by no means clear how the court could properly rely on any of the evidence in seeking to determine the representation or representations conveyed by the Advertisement.

88 Now that I have reviewed these materials, it is worthwhile to note the contrast between Optus' use of the Map and Telstra's use of a map of Australia in the remaining 2 instances where it has been used.

89 I refer to the 2nd publication referred to in Schedule A. Under a heading "Largest coverage" a rough map of Australia appears. It contains no information within the boundaries of the mainland or Tasmania, ie those areas are blank. Immediately below it are 3.5 lines of typed print which refer to Telstra's 3G and 4G mobile networks "covering 99.3 per cent of the Australian population across more than 2.3 million square kilometres" (emphasis added). The use of the map of Australia in these circumstances cannot seriously be said to convey to an ordinary or reasonable person in the Class that the reference to 99.3 per cent is in any way connected to the Australian land mass.

90 The 3rd publication is different, as "4G" appears within the boundaries of the map of mainland Australia. That said, the 8.5 lines of typed print immediately below this map are in similar terms to the Telstra Youtube Promotion.[49] Further, the word "population" is used on both of the 2 occasions when a percentage of Population Coverage is given (being 66 per cent "today" and 85 per cent "by December 2013").

91 It must follow that no person within the Class could have been "conditioned" to understand a map of Australia was linked exclusively or predominantly to Population Coverage rather than Geographic Coverage. Further, for the reasons stated in paragraph 87 above, the evidence of the 11 publications is of little, if any, probative value.

G.3.4 The dominant message of the Advertisement

92 Optus submitted that it was uncertain as to what the main focus or message of the Advertisement was directed. Optus submitted that because it was promoting a particular telephone handset, it might be the "great deal" for the handset that is the message grabbing the attention of the ordinary or reasonable person in the Class, and which therefore is the dominant message.

93 It is correct to contend that the Advertisement has a number of components. But it is irrefutable that a key component of the Advertisement is the focus upon the Geographic Coverage of the Optus mobile network and the comparison with the Telstra mobile network. This aspect of the Advertisement provides the platform upon which Optus seeks to make it attractive to "switch" and enter into the deals that are being offered.

94 Although the deals might be very attractive commercially (there was no evidence about this), and accordingly might attract considerable attention, in my view that possibility does not detract from the dominant message of the Advertisement.

95 Telstra has established its case in relation to each of the Representations.[50] The court will now invite the parties to make submissions in relation to the further conduct of the matter so that there may be a determination as to what relief is appropriate.

ambitious 85 per cent Target set in June when Telstra's 4G coverage was at just 66 per cent of the Australian population

covering 99.3 per cent of the Australian population

covers more than 66 per cent of the Australian population today - growing to 85 per cent of the Australian population by December 2013

more than 4 times the 4G coverage area of other networks

Telstra is all set to more than double the 4G network

over 2.2 million square kilometres of the Australian land mass

the entire 2.2 million square kilometres of network footprint

providing mobile broadband access to 99 per cent of Australians

expanding our 4G coverage to 85 per cent of the Australian population

currently reaches 85 per cent of the Australian population

[1] On the condition that Telstra gave the usual undertaking as to damages, Optus gave the following undertakings without admission as to any liability:

(1) Not to book any further advertising placements for the Advertisement from today until 4.00 pm on Wednesday 12 February 2014 or further order.

(2) To remove the Advertisement from the website referred to in paragraph 14 of the affidavit of Heath Richard Gibson affirmed 7 February 2014, until 4.00 pm on Wednesday 12 February 2014 or further order.

[2] Although there was evidence before the court as to the differences between 3G and 4G, such matters are not relevant to the outcome of this proceeding.

[3] Optus referred the court to Telstra Corporation Ltd v Cable & Wireless Optus Ltd [2001] FCA 1238, [7] (Ryan J), where Telstra had put forward various ways in which the term "coverage" may be used from "a marketing perspective". In addition to population and geography, "depth" and "drop-outs" were referred to. For the purposes of this case, it is unnecessary for the court to exhaustively define the meaning of "coverage". The word is not used in the Advertisement. Further, to the extent coverage is plainly referred to as a concept in the Advertisement, there is no issue that the concept of coverage generally includes both Population Coverage and Geographic Coverage. In addition, the evidence before the court demonstrates that both Telstra and Optus repeatedly distinguish population from geography in their respective promotions and advertisements concerning coverage of their mobile networks; and that Telstra also provides coverage information concerning geography (albeit not in percentages, but rather as to area measured by square kilometres) in its promotional communications.

[4] That is, before "OPTUS 98.5%" is introduced to the image.

[5] That is, after "OPTUS 98.5%" is introduced to the image.

[6] The first time I saw the Advertisement was when it was shown to me in court.

[8] A complete transcript of the voiceover is as follows:

"When it comes to the percentage of Australians the Optus mobile network reaches, there isn't much difference between us and Telstra. In fact, it's less than 1 per cent.

And right now, when you switch to our awesome $35 My Plan, you can get a Samsung Galaxy S111 for zero dollars upfront.

Or, a Samsung Galaxy S4 mini for just $5 a month.

So, for an awesome deal on an awesome network, make the switch to Optus My Plan."

[10] Cf Australian Competition and Consumer Commission v SMS Global Pty Ltd [2011] FCA 855, [15]-[16] (Murphy J); Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470, 476 [23] (Gordon J); Telstra Corporation Ltd v Cable & Wireless Optus Ltd [2001] FCA 1238, [22] (Ryan J).

[11] A similar observation was made in Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470, 476 [23].

[12] Cf Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470, 478 [38].

[13] For completeness, I note that the materials tendered do not indicate what, if any, definition of "coverage" was used in conducting the survey.

[14] [2013] HCA 54; (2013) 304 ALR 186 (French CJ, Crennan, Bell and Keane JJ, Gageler J dissenting).

[15] Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470, 474 [14] (Gordon J); Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45, 86-87 [105] (Full Court); National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 49 ACSR 369, 373-374 [18] (Dowsett J, with whom Jacobson and Bennett JJ relevantly agreed).

[16] Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304, 319 [25]-[26] (French CJ); Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470, 474 [16] (Gordon J); Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592, 604 [36] (Gleeson CJ, Hayne and Heydon JJ); Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45, 85 [102]-[103], 86-87 [105]-[106] (Full Court); Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191, 199.3 (Gibbs CJ).

[17] Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470, 475 [17]; .au Domain Administration Ltd v Domain Names Australia Pty Ltd [2004] FCA 424; (2004) 207 ALR 521, 527 [15] (Finkelstein J). See also, for example, the section of the public identified in Talmax Pty Ltd v Telstra Corporation Ltd [1997] 2 Qd R 444, 446.7 (Fitzgerald P, Davies JA and Moynihan J).

[18] .au Domain Administration Ltd v Domain Names Australia Pty Ltd [2004] FCA 424; (2004) 207 ALR 521, 527 [15].

[19] .au Domain Administration Ltd v Domain Names Australia Pty Ltd [2004] FCA 424; (2004) 207 ALR 521, 527 [16]; Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45, 85 [102], 86-87 [105] (Full Court). There may be an issue as to whether there is a requirement to show that a significant number, or a not insignificant number, of members of the relevant class or classes have been misled, however this question does not arise on the facts of this case. See the discussion suggesting there is no such requirement, rejecting earlier authorities to the contrary, in .au Domain Administration Ltd v Domain Names Australia Pty Ltd [2004] FCA 424; (2004) 207 ALR 521, 528-530 [22]-[26], and see Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 46; (2008) 75 IPR 505, 515 [44] (Middleton J) and, on appeal[2008] FCAFC 181; , (2008) 251 ALR 1, 9 [37] (Tamberlin J), 13 [55] (Finkelstein J), 16-18 [68]-[72] (Siopis J); Global One Mobile Entertainment Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 134, [108] (Greenwood, Logan and Yates JJ).

[20] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 304 ALR 186, 196 [49] (French CJ, Crennan, Bell and Keane JJ); Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304, 319 [25] (French CJ).

[21] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 304 ALR 186, 194 [39] (French CJ, Crennan, Bell and Keane JJ).

[22] [2013] HCA 54; (2013) 304 ALR 186. The representations and surrounding circumstances considered by the High Court are clearly distinguishable from those before this court. However, the observations made are of general application.

[27] [2010] FCA 1272; (2010) 276 ALR 102.

[28] At 105 [7]. See also Amalgamated Television Services Pty Ltd v Marsden [1998] NSWSC 4; (1998) 43 NSWLR 158, 165E-166B (Hunt CJ at CL, with whom Mason P and Handley JA agreed). I note that, although some of the observations in this passage in relation to the "transient form" of electronic media are less relevant to circumstances in 2014 than they were in 1998, the observations made in this passage, generally speaking, still accord with conduct applicable to an "ordinary" or "reasonable" consumer of the various forms of publication referred to.

[29] (2013) 304 ALR 189, 198 [55] (French CJ, Crennan, Bell and Keane JJ).

[30] There is nothing in the evidence to suggest the Advertisement as published on the internet is a "pop-up" advertisement or an advertisement imposed on another publication on a website.

[31] Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45, 84 [100] (Full Court).

[32] Based on the Australian Government's website, Australia.gov.au, Australia comprises a land area of approximately 7.692 million square kilometres. Assuming that figure to be correct, then it appears 2.356 million square kilometres represents approximately 30.6 per cent of the Australian land mass and 970,000 square kilometres represents approximately 12.6 per cent.

[33] There was some suggestion at the interlocutory hearing that the Advertisement might have been first broadcast on 26 January 2014. Nothing turns on the precise date on which broadcasting of the Advertisement commenced.

[34] http://www.Youtube.com/watch?v=w21kywHrhk8.

[36] See par 31(3) above. See also Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 304 ALR 186, 195 [45] (French CJ, Crennan, Bell and Keane JJ).

[37] Cf Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 304 ALR 186, 198 [55] (French CJ, Crennan, Bell and Keane JJ). See par 33 above.

[39] It has long been recognised that particular care is required in relation to comparison advertising: see, for example, Hoover (Australia) Pty Ltd v Email Ltd [1991] FCA 511; (1991) 104 ALR 369, 375.4 (Gummow J), referring with approval to Duracell Australia Pty Ltd v Union Carbide Australia Ltd (1988) ATPR 40-918, 49,861.8 col 1 (Burchett J); see also Stuart Alexander & Co (Interstate) Pty Ltd v Blenders Pty Ltd [1981] FCA 152; (1981) 37 ALR 161, 163.9 (Lockhart J).

[41] This was a term used by senior counsel for Telstra to describe the alternative case: see par 17 above.

[42] It was common ground that the state of the understanding of consumers is not static. As senior counsel for Optus put it: "the telco industry ... is forever evolving and things ... on both sides of the field, as a user, keep getting better and better".

[43] Cf Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470, 478 [38] (last sentence) (Gordon J).

[44] There were 2 versions of the Previous Advertisement, both using the same relevant voiceover.

[45] Cf, for example, SC Johnson & Son Pty Ltd v Reckitt Benckiser (Australia) Pty Ltd [2012] FCA 1266; (2012) 298 ALR 215, 234-235 [118]-[122] (Yates J).

[47] It is the last of the publications referred to in schedule A.

[48] The publications were referred to in the following terms: (1) media release; (2)-(4) Telstra website; (5)-(10) Telstra exchange website; and (11) Youtube.

[50] Subject to what is said in pars 55-59 above.