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Carsales.com takes rival Carsguide.com.au to court over ‘misleading’ ad campaign

Carsales.com is taking rival Carsguide.com.au to court over an advertising campaign launched this month, with Carsales asserting it is misleading and deceptive.

Carsales is arguing seven representations made in the campaign, which started on June 15, were false including the claim that carsales.com sells a consumer’s contact details to dealers, that carsales.com passes on a consumer’s details to dealers without the consumer’s knowledge and that a consumer’s details are provided to a range of dealers if the consumer enquires about a car using the website.

One execution of the campaign, created by BWM Dentsu, saw CarsGuide position a lightning embossed blimp directly over competitor CarSales’ head office in Melbourne alongside a billboard reading ‘Let lightning strike those who sell your contact details to dealers’.

Carsales.com CEO Greg Roebuck has said the ads are “misleading” and in the court action Carsales.com is seeking orders that Carsguide.com.au cease making the claims and publish corrective ads.

“We have sent a cease and desist letter to carsguide.com.au but they have thus far refused to remove the ads. We believe that we had no choice but to go to the Supreme Court to stop carsguide.com.au and their attempts to mislead the Australian public,” he said in a statement.

“As Australia’s No.1 new and used car site we have an obligation to do the right thing by the millions of satisfied people that use our site. We would not have achieved the position we have – a consumer trusted and clear market leading business – if we were doing anything untoward.

“carsguide.com.au has gone out of its way to imply we’re in the business of selling consumer contact information to multiple dealers.  This is untrue.  Consumer contact information is only provided to the owner of the specific car that is enquired upon and to no one else.  There is no significant difference between the way in which carsales.com.au and carsguide.com.au provide contact details to the relevant dealer.  Moreover, if you’re enquiring on private seller cars (for example), on either site, dealers are not involved at all.”

CarsGuide CEO Lauren Williams has defended the campaign, saying they want consumers to make an “informed decision” when chosing to use Carsales or CarsGuide.

“We knew most consumers had no idea that when they inquired about a car on Carsales their contact details were being sold to the dealer. Our campaign aims to drive broad awareness on this little known transaction. We want consumers to have the opportunity to make an informed decision – either be part of the transaction, or use CarsGuide where dealer location and name are shown up front,” said Williams in a statement.

When CarsGuide launched  it replicated the same business model as market leader CarSales however in January the brand launched a new open model.

 

“When I started as CEO, we could see that the old model of hiding information and selling contact details was not a sustainable practice for a modern online business. We re-engineered our business and dealers now pay for views of their cars and not for consumer’s contact details,” said Williams.

The first hearing is due to take place on July 10.

Miranda Ward 

 

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