Two of the world’s discount eyewear upstarts have faced off in the Federal Court over advertising claims, with British-owned retail chain Specsavers winning relief from what it claimed was misleading advertising run by Canadian online player Coastal Contacts.
Federal Court Justice Peter Jacobsen last week granted Specsavers temporary relief from the advertising campaign run by Coastal Contacts, which trades in Australian and Canada as Clearly Contacts.
Specsavers claimed Coastal engaged in misleading or deceptive conduct after the online retailer ran Google AdWords advertisements on results pages where users searched the words “contacts” and “Specsavers”.
When those keywords were used, a text ad posted by Costal said: “Buy online and save up to 70%”.
Specsavers’ legal team argued this was a “hanging representation”.
“Specsavers does not allege that the representation is false in itself,” Jacobsen wrote in his judgement. “Rather, [Specsavers’ barrister] submits that the representation is false or misleading when viewed by a consumer who types in the key words ‘contacts’ and ‘Specsavers’. That person will ask himself (or herself) the question, ‘70% of what?’ and assume that the comparison is made with Specsavers.”
Specsavers also complained about text on the Clearly Contacts website, including representations about free and “super fast” shipping and a line in its “Our story” section in which the company said it could offer “... the same designer brands and products offered in brick-and-mortar stores for half the price.”
In granting Specsavers “interlocutory relief” against the Coastal claims, Jacobsen noted that many of the issues had been addressed by changes Coastal had made to its advertising material.
Attempts to contact representatives of both Specsavers and Coastal prior to publication were unsuccessful.
Specsavers and Coastal share some similarities in that they have both had success entering the previously staid eyewear market offering discount products.
Specsavers, which arrived in Australia in 2008, was started by British pair Doug and Mary Perkins. The pair has taken advantage of the deregulation of optometry to expand rapidly around the world. The company, which operates a franchise model, has been particularly successful in Australia with an offer of two glasses for the price of one.
Coastal Contacts is listed on the Toronto Venture Exchange. It was started in 2000 by young entrepreneur Roger Hardy as an online-only discount player. The company now has annual sales of $171 million and more than 200 staff.
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