REA and Domain in split Federal Court decision over misleading ads as judge calls most just ‘puffery’

A Federal Court battle between REA Group and Fairfax’s Domain over a series of ads promoting the Domain app has seen a judge rule some were misleading while others were merely “advertising puffery”.

Domain spring 2REA had launched the action alleging the series of ads last year by its real estate rival claiming it was variously Australia’s “#1 property app”, “Australia’s highest rated property app”, and had more listings in the Sydney and Melbourne market, was false and misleading.

In what amounted to a split decision, both sides are claiming victory.

In a lengthy decision running to 61 pages, Justice Bernard Murphy looked at the REA’s claims about the ads, included concerns about how Domain had used apple and Google Play consumer ratings in its ads, and whether people understood the nature of the ads.

domain-1Across the majority of the ads Murphy found that Domain had indulged in a level of “puffery” common in advertising and generally understood to be as such by consumers.

“The ordinary reasonable reader would be accustomed to puffing claims in advertising, and would know that claims to be “No.1”, “the best” or “the greatest” are commonly made in trade,” Murphy noted in his ruling.

On the majority of the outdoor, print and social media ads, he took the view that: “I do not consider that in publishing the balance of the claims in the advertisements Domain made false or misleading representations, nor that it engaged in misleading or deceptive conduct or conduct which was likely to mislead or deceive.”

However, he found in favour of REA’s claims that in some cases qualifiers were not prominent enough to capture the attention of people seeing the ad.

He ruled that the claims by Domain of having having the most property listings in Sydney on the web, the most property listings in Sydney on the app could not be sustained.

He noted the qualifier used below Fairfax’s “Most Listings” advertisement was not prominent enough to clarify that it was a reference to established properties in the Greater Sydney Region, and in that way, the “Most Listings” claim will have misled some of the audience reading it.

Tracey Fellows, REA CEO

Tracey Fellows, REA CEO

REA Group CEO Tracey Fellows said the action had been worthwhile.

We believe that today’s judgment is a good outcome and justifies the reason we took action in the first place,” Fellows said.

“Our aim in taking this action was to ensure customers and consumers are able to make informed decisions based on reliable facts. We are one step closer to keeping our competitor honest and accountable to provide reliable and fact based information.

“Our focus continues to be delivering on our purpose to change the way the world experiences property. We’ll do this by offering the best digital property experiences, and providing data and information which delivers value for our customers and consumers.

Domain Group CEO Anthony Catalano said the judgement was welcome.

“A year ago, REA began litigation proceedings against Domain in the Federal Court. Seven claims were lodged. One was dropped throughout the proceedings. Four were lost, two were won,” Catalano said.

“I’ll have more to say on the detail in a few weeks. It’s incredibly amusing to see the PR machine REA has swung into place to justify their action. I have said before, REA’s strategy is ‘litigate and imitate’. For a business that spends an extraordinary amount of time telling the media how much bigger they are than Domain, they spend a lot of time and money watching us.”


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.