Supreme Court rules CarsGuide ads attacking Carsales are misleading, deceptive

CarsGuide’s recent ad campaign attacking competitor Carsales has been deemed misleading or deceptive by the Supreme Court of Victoria.

Carsales took legal action against the challenger brand after CarsGuide launched its campaign across TV, radio, newspaper and billboard advertising.

Both companies are online platforms connecting car buyers with new and used car dealerships and private sellers.

The campaign aimed to tell buyers that CarsGuide dealt with their contact information differently to the incumbent Carsales by using cheeky language now deemed misleading.

The Carsguide campaign in question included:

  • Two 15-second TV ads: a neatly-dressed woman stands over the words ‘carsguide.com.au’, while an aggressive, overweight man dressed in beige and brown stands over the words ‘carsales.com.au’. In one ad, the man says, “You shall not pass until you’ve handed over all your contact details”.
  • three radio ads: featuring angry bleeped conversations between two people who had given their contact details to Carsales.
  • a billboard: right outside the Carsales office with the words, “Let lightning strike those who sell your contact details to dealers.”
  • a Facebook ad: with a similar message to the billboard and a video, and
  • the following print ad that appeared in newspapers across the country.

 

carsguide print ad

 

According to the court records from the 13 July hearing, CarsGuide argued that the campaign aimed to show that Carsales sold buyer contact details to its client car dealers, while CarsGuide did not.

Carsales explained that it charged a small fee when giving dealers the contact details of members of the public who entered it into the website.

CarsGuide said Carsales’ methods of on-selling contact information to dealers subjected buyers to unwelcome “harassment” by dealers of cars they were not necessarily interested in buying.

Justice James Judd rejected CarsGuide’s “altruistic” defence of its business model.

“The defendant aspired to a model that reflecting a return to a less pressured past era, when buyers could attend a dealer’s place of business to look at cars without the risk of ‘harassment’, because no contact details had been sold to the dealer,” he says in the court record.

“It would be fanciful to conclude that the defendant was disinterested in the value to its client dealers of marketing information in the nature of buyer details. The plaintiff and defendant are in the business of providing dealers with a website based marketing service to sell motor vehicles.”

Both charge fees for their services under different business models, but for both, their success depends on generating sales for client dealers and private sellers, Judd determined.

“The defendant’s purpose, evident from the advertising campaign, was to frighten away potential and existing users of the plaintiff’s website with false or misleading messages in which the plaintiff was portrayed as dishonest, untrustworthy and opportunistic.”

Marketing first reported on CarsGuide’s business transformation last September, when it relaunched its business model and website, saying “the way car sites work today is fundamentally broken”.

RELATED: CarsGuide’s cheeky billboard placement takes swipe at market leader »

CarsGuide CEO Lauren Williams has announced the advertising campaign will be discontinued.

“Unfortunately the court found that the advertisements conveyed misleading representations. Carsguide regrets this.”

Michelle Herbison
BY Michelle Herbison ON 29 July 2015
Assistant editor, Marketing Magazine.