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Blogger’s court case highlights franchise war between newsagency rivals Nextra and newsXpress

The Federal Court has found posting on a blog can be misleading conduct “in trade and commerce” under the Australian Consumer Law in a dispute between the author of the Australian Newsagency Blog and a newsagency franchise.

In a judgment handed down last week, the Federal Court ordered the removal of the blog post “Nasty campaign from Nextra misleads newsagency” from the Australian Newsagency Blog and restrained the author, Mark Fletcher, from publishing the blog post in any other form.

The judgment was the culmination of a legal battle between Fletcher and newsagency franchise Nextra. 

Fletcher is the author of the Australian Newsagency Blog, which receives around 1300 visitors a day, and also a director and 50% shareholder in newsXpress, the franchisor of a newsagency franchise system throughout Australia which competes with Nextra.

Fletcher wrote the blog post after receiving a flyer entitled “Believe the industry rumours. There are many stores changing to the Nextra group”. The flyer claimed many newsagencies were joining up as Nextra franchisees and cited examples of newsagents who had joined.

In his blog post, Fletcher claimed the flyer used fear to try and generate interest in Nextra.

“The Nextra leadership team would be better off spending time making their group more appealing on results rather than trying to talk down a competitor,” he wrote.  

The Federal Court found Fletcher had engaged in misleading and deceptive conduct under Australian Consumer Law.

Justice Collier found Fletcher has “a genuine interest and aim” in promoting discussion in the newsagency community on topics of interests to newsagents, and the Australian Newsagency Blog was key to doing this.

“However, I am also satisfied that Mr Fletcher has not hesitated to use the blog to promote his own commercial interests (including newsXpress),” Justice Collier found. 

Fletcher told SmartCompany he disagreed with the court’s findings that the blog was in trade and commerce.

“I’d argue the only way to decide whether the blog is in trade or commerce is to read the entire blog, all 13,000 entries,” he says.

“The court just looked at an extremely narrow selection of blog posts. I think if you speak to a lot of newsagents whether they consider it is for commercial activity, most would say no.”   

Fletcher says so far the court case has cost him “many tens of thousands of dollars” in legal costs.

“To this day I still don’t understand why Nextra has pursued this,” he says.

Fletcher says he now questions each time he sits down to write about something.

“I understand a lot of journalists look upon bloggers as not adhering to the same standards and possibly not having the same professional standards as journalists” he says.

“I’d like to think I’ve approached my blogging in a professional and ethical way. There are many times I’ve been given information that I haven’t put on the blog as I haven’t been able to verify it. In this case I had a brochure sent to me which in my mind raised concerns, so I wrote about that.”

Fletcher is considering whether to appeal the judgment.

Melissa Monks, special counsel at law firm King & Wood Mallesons, told SmartCompany since the advent of social media, businesses, regulators and courts have been grappling with where to draw the line as to whether posts on social media sites such as Facebook and LinkedIn or a blog post can be made in trade or commerce. 

“There is a clear warning from this decision that individuals blogging or engaging in other online messaging whose motives for doing so can include promoting or protecting their commercial interests, including ownership of existing businesses or obtaining sponsorship or advertising from a site, may be found to be acting in trade or commerce and therefore responsible for their content from a misleading conduct perspective,” Monks says.

But she says this will not always be the case, and will be a matter that needs to be considered in every case. 

“For example, it is unlikely to be in trade or commerce where blogging about subjects unrelated to your business, providing lectures or writing opinion pieces in trade journals,” Monks says.

“Regardless of the forum, whether it is online, at a business meeting or in an advertisement, it is best practice risk management to ensure the representations you make are true and correct in all respects.”

SmartCompany contacted Nextra but did not receive a response prior to publication.

 

 

 

 

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Cara Waters

SmartCompany editor

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Cara Waters is the editor of SmartCompany. Previously, Cara was a senior reporter at the Financial Times website FT Adviser in London and she also worked for The Sunday Times in London.
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