Consumer survey not misleading

The Federal Court has today dismissed an application by Specsavers regarding Canstar Blue’s recent independent consumer survey on optometrists. Specsavers claimed the survey results were misleading. The Federal Court found that Specsavers failed to show reasonable cause to believe that the survey results were misleading, sending a strong warning to businesses who wish to sue because they are unhappy with consumer survey results or ratings.

Specsavers was unhappy for various reasons, and asked Canstar Blue to provide details of how the survey was conducted and how the star rating was determined. Canstar Blue refused to provide Specsavers with detailed information regarding the survey.

Specsavers brought an action in the Federal Court against Canstar Blue for preliminary discovery of documents relevant to the survey.

Specsavers alleged a possible breach of s 52 of the Trade Practices Act 1974 (Cth) based on its concerns that the survey results may be misleading due to asserted inaccuracies and defects in the methodology and ratings. Specsavers claimed it did not have enough information to determine whether to commence proceedings against Canstar Blue and applied for preliminary disclosure from Canstar Blue.

The Federal Court dismissed this application, and in doing so made comments demonstrating that it is difficult to bring a successful legal claim where a business is not pleased with how it was ranked in a consumer survey.

Currency of results

• When first published on Canstar Blue’s website, the survey was stated to be of people who had 'recently' visited their optometrist. The questionnaire included a question asking whether people had they visited an optometrist in the previous two years. Specsavers complained that there was a distinction between 'in the last two years' and 'recently'. When Specsavers complained, Canstar Blue updated its website to clarify this point. Specsavers did not adduce any evidence to suggest that it had suffered any loss or damage prior to the website being updated. The Court held that this was “fatal to Specsavers’ claim”.
• Specsavers also brought evidence that not all of its current stores were open two years ago. Canstar Blue submitted that whether a survey respondent had visited one of the stores open two years ago, or one of the new stores is of no relevance. The Court agreed with this submission. The Court also agreed with Canstar Blue’s submission that the fact that one of the companies surveyed has changed aspects of its business over the survey period cannot make the whole survey misleading.
• The Court held that Specsavers failed to satisfy all three conditions required for the granting of an order for preliminary discovery. Specsavers did not show reasonable cause to believe it may have the right to claim relief regarding the currency of the survey results. Specsavers also failed to identify any information that it lacked in order to make a decision as to whether to proceed with a claim against Canstar Blue. On the contrary, the Court found that Specsavers already had the relevant information in relation to its claims regarding the currency of the results. Specsavers was also not able to demonstrate that Canstar Blue had any documentation which would assist Specsavers in deciding whether to commence proceedings.

Accessibility of stores

• Specsavers claimed that one interpretation of the category of ‘accessibility of stores’ is that it is easy for the majority of the population to get the store and noted that the category was won by a regional chain without stores in all States and Territories.
• Canstar Blue successfully submitted that it is not making any representation as to: the accessibility of stores; the correctness of the views expressed by the survey respondents; or the national reach of the brand. The term ‘accessibility’ can be interpreted in many ways.
• The Court held that “there is nothing to suggest misleading or deceptive conduct in the reporting of the survey results” and Specsavers had failed to satisfy the preliminary discovery test.

Visits not purchases

• Specsavers claimed that survey respondents who only visited an optometrist but did not make a purchase could not make a meaningful response on the 'after sales service' and 'price' criteria.
• Canstar Blue submitted that the concern is misconceived. Specifically, the prices for frames are often displayed or available within the store. More generally, there was no evidence that respondents to the survey gave an opinion on categories of which they had no experience; such respondents would be likely to respond 'don't know' or 'not applicable'. The Court agreed that “the s 52 case is complete speculation, and highly improbable speculation at that”. Specsavers failed to meet the first condition required for preliminary discovery.

Rating system

• Specsavers claimed that if there was a defect in Canstar Blue’s methodology then the publication of the results may be misleading. However, Specsavers did not submit any evidence on this point, it merely stated its concern. The Court held that a concern “does not amount to evidence that there is any problem, or even any likely problem” with Canstar Blue’s approach. Again Specsavers failed to meet the first condition required for preliminary discovery.

The Court in effect recognised that there is a public interest in the conduct and publication of independent surveys of consumer sentiment. Consumers should know what other consumers have to say about products in the market place. A functioning economy requires a market that is supplied with information.

Accordingly, this case demonstrates that Courts are hesitant to allow the disgruntled subjects of independent consumer surveys, like Specsavers, from using Court processes to impose significant costs on persons who conduct surveys, on the basis of speculative claims of possible misleading and deceptive conduct. If such a practice is encouraged, it will have a chilling effect on the number of surveys conducted, which will, in turn, reduce the supply of information to the marketplace.

Results based on the views and opinions of survey respondents should not be misconstrued as representations by the entity publishing the results.

Thus, the analysis may be different if it was a competitor of Specsavers that conducted the survey and published the results to promote its own products.

Mallesons Stephen Jaques represented Canstar Blue in this litigation.