FEDERAL COURT OF AUSTRALIA

Global One Mobile Entertainment Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 134

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

2.    The appellants shall pay the costs of the respondent of and incidental to the appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

REASONS FOR JUDGMENT

GREENWOOD, LOGAN AND YATES JJ

Background

1    The appellants are entities that carry on the business of promoting and supplying to consumers services described by the primary judge at [3] as mobile telephone premium services. The appellants are known as content service providers. They provide content for use on mobile telephone networks. They are wholly owned subsidiaries of MobileActive Limited (“MobileActive”) which is an Australian-based company that develops, aggregates, markets and distributes a diverse range of mobile entertainment and related services including video games, videos and quizzes.

2    In the proceedings before the primary judge, the Australian Competition and Consumer Commission (the “Commission”) contended that in the course of the promotion and supply of mobile telephone premium content services (relevantly comprised for present purposes of mobile telephone ringtones, quizzes and video games) the first appellant, Global One Mobile Entertainment Pty Limited (“Global One”), and the second appellant, 6G Pty Limited (“6G”), engaged in conduct in contravention of ss 52, 53(aa), 53(c) and 53(e) of the Trade Practices Act 1974 (Cth) (the “Act”) which, pursuant to s 7(1) of Schedule 7 of the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 (Cth), continues to govern the conduct in issue in these proceedings rather than the provisions of the Competition and Consumer Act 2010 (Cth) which commenced operation from 1 January 2011.

3    By its Fast Track Statement dated 20 October 2010 the Commission contended that the appellants had caused four advertisements to be published although the second advertisement contains two versions of what is known as the Quiz Advertisement.

4    Before describing these advertisements and the findings of the primary judge concerning their content, the particular features given emphasis by the primary judge and related contextual matters, it is important to note that in the course of the appeal, each advertisement was screened in Court. Accordingly, the members of the Court have been able to see and hear each advertisement as broadcast to consumers. In addition, the appeal record contains a disk (Exhibit TCD-1) loaded with each of the advertisements and the members constituting the Court have been able to replay each of the advertisements as often as each member of the Court thought appropriate in reaching a decision on the appeal and in formulating these reasons.

5    As to the first advertisement, the Commission contended that from 14 February 2010 to 22 May 2010 Global One caused the publication of a television advertisement by which consumers could obtain the song One Time by Justin Bieber as a mobile phone ringtone (the “Justin Bieber Advertisement”). The primary judge found at [11] that the Justin Bieber Advertisement is approximately 15 seconds long and contains a video clip of Justin Bieber singing the song One Time with a voiceover stating:

Subscribe for One Time ringtone. Text one to 194888. Get Justin Bieber’s new hit on your mobile today. Text one to 194888. Get mobile active.

6    The primary judge found at [12] that for the duration of the Justin Bieber Advertisement, the following words appear in small print towards the bottom of the screen:

Subscription $6.60 x 2 ($13.20) to join + $6.60 per six days inc. GST

7    The primary judge also found at [13] that below those words are the following words in small print:

To cancel text stop to 194888. Related offers sent via SMS, to opt out text stop to 19721122. You get access to music, videos, games plus more. Minimum three content items per charge period. 15 yrs + only and must have bill payers permission. Ensure WAP enabled. Normal carrier data and message charges may apply. Access varies carrier/plan. [mobile active website] For help phone 1300556761.

8    The primary judge also found that the word MobileActive appears on the screen during the whole of the Justin Bieber Advertisement.

9    As to the second advertisement the Commission contended that from 7 March 2010 to 7 July 2010, 6G caused the publication of two versions of a television advertisement promoting a mobile phone quiz game offering consumers the chance to win $100,000 in cash and weekly prizes (the “Quiz Advertisements”). The point of differentiation between the two advertisements is the topic the subject of the quiz question in the second part of the Quiz Advertisements. The primary judge found at [23] and [24] that the second advertisement is approximately 30 seconds long and contains a voiceover that states: “Subscribe and you could win $100,000” and a person on screen then says:

Want to win $100,000 cash? Grab your mobile phone and play the mobile gold super quiz. Play for your chance to win $100,000 cash plus fantastic weekly prizes. It’s easy. Here is your first question.

10    The primary judge found at [25] that in the first version of the second advertisement, a voiceover in the second part of the advertisement says:

What does H2O stand for? Water or Gold? Text your answer to 191919. Text water or gold to 191919 and you could win $100,000. South Australian and New South Wales residents no quiz content subscription only.

11    At [26], the primary judge found that in the second version of the second advertisement, a voiceover in the second part of the advertisement then states: “The Titanic was a ship or train? Text your answer to 191919. Text ship or train to 191919 and you could win $100,000”.

12    At [27], the primary judge found that the second advertisement contains small print towards the bottom of the screen which changes during the course of the second advertisement and for the first 15 seconds of the first part of the second advertisement, the following words appear on screen:

Entrants subscribe to the MobileGold Mobile content service. Quiz open to AUS Residents except SA and VIC. 18+ with bill payer’s permission. Major prize runs 07/03/10 – 04/09/10. Promoter Global One Mobile Entertainment Pty Ltd. Authorised under Permit No NSW: LTPS/10/01477 ACT: TP/10/00365.1 Full terms and conditions at [mobile gold website]. Related offers sent via SMS, to cancel send stop to 19721122.

13    At [28], the primary judge found that after 15 seconds the following words appear on screen in the second part of the second advertisement: “By entering this promotion you subscribe at a cost of $4.50 join fee + $4.50 x 2 per week ($9.00)” and at [29], below these words are the following words:

Minimum three content items per charge period. To cancel reply stop to 191919. SMS max cost $0.55. Customer service 1300886503. Normal carrier and data messages may apply. Service Provider 6G.

14    As to the third advertisement, the Commission contended that from 21 March 2010 to 24 April 2010, 6G caused the publication of a television advertisement representing that consumers could receive the “Space Invaders” game on their mobile phone (the “Space Invaders Advertisement”). At [36], the primary judge found that the advertisement is approximately 15 seconds long and contains the following voiceover:

Space Invaders is back. Subscribe and get the world’s most famous video game on your mobile. Text S17 to 191919. Get the game that started it all. Space Invaders on your mobile. Text S17 to 191919.

15    At [37], the primary judge found that for the duration of the third advertisement, the following words appear in small print towards the bottom of the screen: “Subscription $3.50 x 2 ($7.00) to join + $3.50 per day inc. GST” and at [38], below these words the following words appear in small print:

To cancel text stop to 191919. Related offers sent via SMS, to opt out text stop to 19721122. You get access to music, videos, games plus more. Minimum three content items per charge period. 15 years + only and must have bill payers permission. Ensure WPA enabled. Normal carrier data and message charges may apply. Access varies carrier/plan. For help ph 1300556761.

16    As to the fourth advertisement, the Commission contended that from 23 May 2010 to 12 July 2010, 6G caused the publication of a television advertisement representing that consumers could receive the “Doodle Jump” game on their mobile phone (the “Doodle Jump Advertisement”). At [42], the primary judge found that this advertisement is approximately 15 seconds in length. A voiceover states:

Jump Jump Jump. Subscribe to Doodle Jump the mobile game. Text jump to 191919. Doodle Jump the addictive game hundreds of thousands of fans play. Get it on your mobile now. Text “jump” to 191919.

17    At [43], the primary judge found that throughout the fourth advertisement, the following words appear in small print towards the bottom of the screen: “Subscription $3.50 x 2 ($7.00) to join + $3.50 per day inc. GST” and at [44], below those words the following words appear in small print:

To cancel text stop to 191919. Related offers sent via SMS, to opt out text stop to 19721122. Minimum three content items per charge period. 15 yrs + only and must have bill payers permission. Ensure WAP enabled. Normal carrier data and message charges may apply. Access varies carrier/plan. For help ph 1300556761. Content provider is 6G Pty Ltd.

18    At [45], the primary judge found that the word MobileActive appears on the screen on part of the Doodle Jump Advertisement although not clearly.

19    By para 37 of the Fast Track Statement, the Commission contended that by publication of the Justin Bieber Advertisement, Global One represented that a consumer responding to the advertisement, by sending an SMS message at a standard SMS cost to a premium number (19 48 88), would purchase a one-off service, namely, one Justin Bieber ringtone at a one-off cost, whereas, in truth, a consumer who sends an SMS message to the premium number requests access to a subscription service charged at premium rates and when the consumer subsequently accepts the service (through the process described later in these reasons but generally described as the “double opt-in” process), the consumer pays an initial sign-up fee of $13.20 and a subscription fee of $6.60 every six days (described as the “weekly subscription fee”) which fees are billed to the consumer’s mobile telephone account, and incurs standard SMS and data costs levied by the consumer’s telecommunications service provider, in addition to the weekly subscription fee.

20    By para 39 of the Fast Track Statement, the Commission contended that by publication of the Quiz Advertisements, 6G represented that a consumer responding to those advertisements, by sending an SMS message at a standard SMS cost to a premium number (19 19 19) would purchase a one-off service, namely, one entry into a quiz game promoting the chance to win $100,000 at a one-off cost, whereas, in truth, a consumer who sends an SMS message to the premium number requests access to a subscription service charged at premium rates and when the consumer subsequently accepts the service (through the double opt-in process), the consumer pays an initial sign-up fee of $4.50 and a subscription fee of $9.00 per week which fees are billed to the consumer’s mobile telephone account, and incurs standard SMS and data costs levied by the consumer’s telecommunications service provider, in addition to the weekly subscription fee; and in order to end the consumer’s subscription, the consumer is required to send an SMS message to 6G containing the word “stop”.

21    At para 40 of the Fast Track Statement, the Commission contended that by publication of the Space Invaders Advertisement, 6G represented that a consumer responding to the advertisement, by sending an SMS message at a standard SMS cost to a premium number (19 19 19) would purchase a one-off service, namely, the “Space Invaders” game at a one-off cost, whereas, in truth, a consumer who sends an SMS message to the premium number requests access to a subscription service charged at premium rates and when the consumer subsequently accepts the service (through the double opt-in process), the consumer pays an initial sign-up fee of $7.00 and a subscription fee of $3.50 per day which fees are billed to the consumer’s mobile telephone account, and incurs standard SMS and data costs levied by the consumer’s telecommunications service provider, in addition to the weekly subscription fee; and in order to end the consumer’s subscription, the consumer is required to send an SMS message to 6G containing the word “stop”.

22    At para 41, the Commission made similar contentions in relation to the Doodle Jump Advertisement as those made in relation to the Space Invaders Advertisement as described at [21] of these reasons.

23    The Commission contended that by reason of the conduct of Global One and 6G framed in the way described, each company had engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 52; falsely represented that the content services the subject of each advertisement were of a particular standard, quality, value or grade in contravention of s 53(aa); represented that the content services the subject of each advertisement had performance characteristics that they did not have, in contravention of s 53(c); and, made false or misleading representations with respect to the price of the content services in contravention of s 53(e).

24    Although the members of the Full Court have been able to look at each of the advertisements as broadcast in reaching a decision on the appeal and are therefore in the same position in that regard as the primary judge, the findings made and impressions reached by the primary judge nevertheless remain important.

25    Those findings and impressions are these.

The Justin Bieber Advertisement

26    At [10] the primary judge found that the Justin Bieber Advertisement was primarily broadcast outside of school hours or in school hours during the school holiday period. The advertisement was broadcast primarily on Fox8 but also on Arena. The primary judge found at [10] that the Justin Bieber Advertisement was also “apparently” shown on Channel V and Music Max. It was shown during a variety of shows that included “The Simpsons” and “American Idol” as well as during shows such as “The Gilmour Girls” and “Sex in the City”.

27    The primary judge notes that it was not in dispute that Justin Bieber is a very successful young singer who at the time of the Justin Bieber Advertisement was approximately 15 years old and who was and is extremely popular with young girls in the 13 to 15 year age group. Although a witness called for Global One gave evidence that the target audience for the Justin Bieber Advertisement was women in the age group 18 to 24, the witness accepted that the Justin Bieber song One Time would appeal to under 15 year olds. The primary judge found that it was inconceivable that the witness would not have been aware of the likelihood that under 15 year olds would be watching television programs when the Justin Bieber Advertisement was broadcast and would be attracted to the prospect of having a Justin Bieber ringtone on their mobile phones. The primary judge concluded that Global One must have appreciated that the audience that would want a Justin Bieber ringtone would likely be under 18 and most likely under 15 years of age.

28    At [18], the primary judge observes that the advertisement commences with the word “subscribe”; at the bottom of the screen the writing states that the offer is of a subscription service; the subscription results in access to “music videos, games and more”; the offer is for those persons 15 years old and over who have the bill payer’s permission; the writing is on the screen for a sufficient time for a person who wished to read it to do so; the writing is in “small text” and is “difficult to read”; at the same time that the writing is on the screen, the Justin Bieber Advertisement shows Justin Bieber singing and young girls responding; and the “voiceover is distracting”.

29    At [18], the primary judge observes that the first time a person views the advertisement, a person’s attention:

… would inevitably be drawn to the images on the screen, which include Justin Bieber, and listening to the voiceover. It would be easy to miss or disregard the writing on the bottom of the screen. Even if the viewer was aware of or noticed the writing it is, in my view, highly unlikely that the viewer would read it rather than watch everything else on the screen.

30    At [19], the primary judge observes that this impression would be the case for “an adult viewer” and said:

It is, in my view, highly unlikely that a person under the age of 18, let alone under the age of 15, would notice, read or concentrate sufficiently to be able to read the writing.

31    At [20], the primary judge observes that taking the advertisement “as a whole” it:

… is directed to providing an incentive for, and introduction to enable, a person to note the methodology by which the ringtone could be obtained. That is by texting the correct response to the number provided. Without reading the small print or appreciating the purport of the word “subscribe”, there was no indication to the viewer that the ringtone could be obtained only by way of a subscription for that ringtone together with other services, rather than as a one-off purchase of the ringtone alone, or even a purchase at an ongoing price that related only to that ringtone and not to other services.

32    At [20], the primary judge concludes that the use of the word “subscribe” was “totally inadequate to inform the adult viewer, let alone a viewer under the age of 18, that what was being offered was a subscription to a broader service”.

33    As to the representation, the primary judge said this at [21]:

The representation to the consumer was that by responding to the Justin Bieber Advertisement and by sending an SMS message at a standard SMS cost to the number provided in the Justin Bieber Advertisement, [the consumer] would purchase a one-off service, namely, a Justin Bieber ringtone at a one-off cost, rather than requesting access to a subscription service charged at premium rates.

The Quiz Advertisements

34    At [22], the primary judge observes that the Quiz Advertisements were broadcast on the free-to-air channel GO! and “apparently” on the subscription television channels Ch111, Comedy, Fox8, Fuel and V. The advertisements were shown mainly during the day but also in the late afternoon and early evening during programs such as “Seinfeld”, “The Nanny”, “The Jetsons” and “Frasier”. The primary judge observes that at least some of the shows were family television shows and they were broadcast at times which included a school holiday period during which children could reasonably be expected to be watching those programs.

35    At [30], the primary judge observes that the Quiz Advertisements contain information and a series of instructions including, the fact that there is a quiz; the particular question being asked; the need to decide which of the alternative answers to the question is the correct answer; and a need to take note of the number to which the SMS is to be sent or the need to enter that number into a mobile phone.

36    At [31], the primary judge observes that the writing is present on the screen for sufficient time to enable a person who wished to read it, to do so; unlike the Justin Bieber Advertisement, the information relating to the subscription service is not on the screen for the duration of the Quiz Advertisements; the typeface of the printed words is small and difficult to read as well as being surrounded by distracting, colourful images; at the same time as the writing is on the screen, the viewer is asked to text the answer to the quiz question to a number; and, the quiz number would need to be written down or entered into a mobile phone.

37    At [31], the primary judge observes:

In my view, it is highly unlikely that a first time viewer of the Quiz Advertisements would not only notice the writing but also be distracted from the primary message of the Quiz Advertisements in order to read and absorb what the writing conveys. Some concentration would be required to focus on the writing rather than to view the more prominent matters on the screen to which attention is directed by the voiceover.

38    In other words the primary judge thought it highly unlikely that a consumer would notice the writing and highly unlikely that the consumer would be distracted from the primary message of the advertisements in order to read and absorb the information conveyed by the writing.

39    As to context, the primary judge observes at [32] that the word “subscribe” is stated at the beginning of the Quiz Advertisements in the context of a person on the screen explaining the way in which a consumer can win $100,000 and in circumstances in which the viewer is told to find a mobile phone to enable a text message to be sent. The primary judge observes at [32]:

The words are spoken quickly and the Quiz Advertisements concentrate the viewer’s mind on how to win $100,000. The voiceover does not make it clear that the offer is for an ongoing subscription service with ongoing costs until terminated.

40    At [33] as to the question of the costs involved, the primary judge said this:

I am not sure that a viewer would even understand that a cost was involved, over and above the cost of sending the SMS. However, based on the ACCC’s pleaded case, I will assess the Quiz Advertisements by reference to the assertion that what is being offered is a one-off service at a one-off cost.

41    As to the reference to “subscribe” and the dominant impression formed on viewing the advertisement, the primary judge said this at [34]:

The reference to “subscribe” in the initial part of the voice-over and the written reference to “subscription” at the bottom of the screen do not dispel the dominant impression of the whole of the Quiz Advertisements, which is that they are for a one-off service at a one-off cost.

42    As to the representation contained in the advertisements, the primary judge said this at [34]:

The Quiz Advertisements are a representation by 6G that a consumer responding by sending an SMS message at standard SMS costs to the premium number 191919 would purchase a one-off service, namely one entry into a quiz game promoting the chance to $100,000 at a one-off cost.

The Space Invaders Advertisement

43    The primary judge at [35] notes that the parties accepted that the “Space Invaders” game has formerly been a popular game. The advertisement was broadcast on free-to-air television channel GO!, predominantly during school hours and often during family television shows such as “Frasier”, “Seinfeld” and “The Nanny”. It was also shown out of school hours during shows such as “The Flintstones” and “The Marvellous Misadventures of Flapjack”.

44    At [39], the primary judge observes that the voiceover refers only to a single video game; the voiceover does not say that the offer is for an ongoing subscription service with ongoing charges until terminated; the word “subscribe” is used at the beginning of the voiceover in the context of visual images taken from the game together with spoken words and directions to the viewer to text the premium number 19 19 19.

45    At [40], the primary judge said this as to context and impression:

In the context of the graphics, the voiceover, the small size of the writing and the need to note the number to which the text is to be sent, an adult viewer would not take particular notice of the writing, nor have his or her attention drawn to the writing. A fortiori this applies to a person under the age of 18 years. It is highly unlikely that an adult, let alone a person under the age of 18 years would, in context, understand what is encompassed by the words “subscribe” or “subscription”.

46    At [40], the primary judge also said this as to context:

The use of these words [subscribe or subscription] would not, in context, dispel the representation that by simply text messaging the premium number, the viewer would obtain a one-off service, namely the Space Invaders game, for a one-off cost.

The Doodle Jump Advertisement

47    At [41], the primary judge found that the advertisement was broadcast on subscription television channels Fox8, Ch111, Fuel, Comedy and V and on the free-to-air channel GO! It was predominantly screened during the day, that is during school hours although the screening dates include school holiday periods. It was also shown late at night after 10pm. It was shown during family shows which might be considered as children’s shows such as “The Simpsons” and other family shows such as “America’s Next Top Model” and “Friends”. The audience for those shows may include viewers under 18 years of age: [41].

48    The primary judge at [46] adopted for the Doodle Jump Advertisement the same observations and impressions described at [44] to [46] of these reasons, formed by her Honour in relation to the Space Invaders Advertisement.

49    The primary judge made these observations at [71] of the advertisements:

Common to each of the Advertisements is:

●    the fact that the word “subscribe” is only used at the commencement of the Advertisements;

●    background music;

●    moving images;

●    the information that a number or word needs to be texted;

●    the number to which the text message must be sent;

●    the voiceover referring only to one specific ringtone, quiz or game, rather than to an ongoing subscription service with an initial sign-up fee and a daily or weekly subscription fee which is not terminated until the consumer sends a subsequent “stop” SMS;

●    the small size on the screen of the written text containing the subscription information;

●    the ephemeral nature of a television broadcast, which does not enable the consumer to re-read the material as in a printed advertisement. Apart from a reference to a help phone number and (for some of the Advertisements) a website in the small written text, there is no other source presented to the consumer to obtain more information about the nature of the service and reconsider the contents of the Advertisements prior to sending the text message;

●    the duration of the Advertisements being insufficient to enable the viewer to listen to the voiceover and have regard to the strong visual images and then to consider the smaller written text. That is, the viewer is unable to do all of these things in a single viewing; and

●    the “visual clutter” on the screen, which makes it unlikely that the viewer of the Advertisements would notice or concentrate on the words in small print at the bottom of the screen.

The Double Opt-in Procedure

50    The primary judge found at [59] that once a responding person sent a text message of the required phrase to the number nominated in the relevant advertisement, a double opt-in message was sent to the mobile telephone number from which the text was sent. The double opt-in message sent to a responding person for the Justin Bieber Advertisement, as an example, said this as quoted at [59]:

FreeMsg: Hi! Reply YES 2 get ur order + get top games, apps tones & more! MobileActive subscription Help 1300886534. $6.60/6 days 2 x $6.60 to join. Unsub: reply out

51    The message, in this example, called for a text reply of “YES”. At [61], the primary judge observes that it was not in dispute that at the time when the double opt-in message was sent to the responding person (and intended subscriber), that person was “given an explanation of the nature of the subscription service”. The primary judge at [61] found:

If he or she were misled up to that point, for example, had understood that the prospective purchase was of a one-off service, that would no longer be the case; that is, the double opt-in procedure would remove that misapprehension.

                                [emphasis added]

52    The appellants contended before the primary judge as they contend on appeal in seeking to demonstrate error, that publication of the advertisements did not mislead or deceive a consumer of the service because an examination of the whole of the contextual integrated conduct shows that publication of the relevant advertisement was coupled with a computer-generated explanatory text sent to a responding person which required from that person a confirmatory acceptance by text message. Thus, segmenting the whole of the integrated conduct and focusing upon only the publication of the advertisement is said to misunderstand the required inquiry in determining whether the conduct contravenes any of the provisions of the Act relied upon.

53    At [65] and [66], the primary judge considers authorities dealing with the question of whether a subsequent explanation of the effect of an advertised offer, or other post-broadcast steps, might overcome anterior misleading or deceptive conduct arising out of publication of an advertisement which, when seen by relevant members of the consumer cohort, entices, induces or draws the consumer into a purchase transaction or other dealing. At [67], the primary judge observes and finds:

It is clear from these cases that conduct can contravene s 52 of the Act even if, ultimately, the consumer becomes aware of the true situation. However, each case must be looked at according to its facts. This is not a case where a consumer would be expected to examine the label of a product he or she was considering purchasing by reason of the identity of the manufacturer of the product. Here, the relevant conduct is the broadcast of each of the Advertisements in their totality. It is true that a prospective purchaser would be disabused of any misunderstanding by the double opt-in procedure but, if the Advertisements are misleading, that person would have already been misled.

                                [emphasis added]

54    At [68], the primary judge observes that where advertisements are directed by broadcast to members of a class, the inquiry is focused upon the hypothetical reasonable member of the class to whom the advertisements are addressed. At [68], the primary judge found that “the relevant class” for these advertisements is the “general public”. At [68], the primary judge also observed that the parties accepted that at June 2009, “the number of mobile phone services in operation in Australia [that is, throughout the general Australian public] was 24.22 million”. The primary judge also observed at [68] that the relevant inquiry to be undertaken involves these questions: What would each advertisement have conveyed to members of the class (general public)? And, would a significant number of this class be likely to have been misled or deceived? That formulation was refined at [69] by asking whether the misconception alleged to arise, or be likely to arise, is properly attributable to the ordinary and reasonable members of the class of prospective buyers of the advertised services. That class includes the gullible, the astute, the experienced and the inexperienced, and at [70] the primary judge said this:

I propose to consider the effect of the Advertisements on a reasonable adult watching the Advertisements. If such a person is likely to have been misled it follows, in the absence of evidence to the contrary, that someone under the age of 18 would also be misled.

55    The reference to someone under the age of 18 being misled was a reference to the Commission’s contention that a number of prospective buyers of the service would have been under the age of 15 and especially so in relation to the Justin Bieber Advertisement. Nevertheless, the primary judge approached the class as a cohort comprised of reasonable adults watching the advertisement.

56    Having regard to the factors described by the primary judge at [71] (set out at [49] of these reasons) and the finding at [67] that the relevant conduct is the broadcast of each advertisement by which a consumer had “already been misled” before the double opt-in procedure became engaged, the primary judge concluded at [72]:

… I do not accept that the existence of a double opt-in procedure means that the consumer was not relevantly misled. Before the confirmatory opt-in procedure, the consumer had made a decision to enter the quiz, purchase the ringtone or purchase the game. … In order for the double opt-in procedure to operate, the misled person has taken action of a substantive nature, whether or not it ultimately caused significant detriment or financial loss. The double opt-in procedure did not necessarily provide a panacea for the consequences of a misunderstanding of the nature of the cost for obtaining the service, or indeed the fact that it was an ongoing service that was being obtained.

57    At [74], the primary judge further observed:

The double opt-in procedure is not the answer, as asserted by Global One and 6G, to the problem of viewers responding to the Advertisements and subsequently obtaining services for which they did not intend to apply.

58    The primary judge did not accept the contentions of the appellants that to the extent that the advertisements might have conveyed a misleading impression at the moment of publication, that impression was so insubstantial and transient in nature and, in any event, so qualified by an assessment of the practical consequences and impact of the conduct that publication was not likely to be misleading or deceptive in any “commercially significant sense”.

59    At [77], the primary judge accepted that the circumstances reflected in the conduct in issue did not engage the principles seen in cases where the representations are designed to draw a consumer into a “marketing web”. At [77], the primary judge said this:

The nature of the service being offered in the Advertisements means that, notwithstanding the reference to a help phone number and, for some of the Advertisements, a website in the small written text at the bottom of the screen, the only source of information available to the consumer before making the decision to send the text message was contained in the Advertisements themselves. That is, unlike the “marketing web” cases, there was no store for the consumer to visit, nor even any method of contact available to the consumer to find out more about the service. Given that the reasonable consumer would be unlikely to have written down the help number or the website in the written text in the time available during the screening of each of the Advertisements, this is not a factor that assists Global One or 6G.

60    As to the characteristics of the reasonable consumer, the appellants contended before the primary judge as they contend on appeal in seeking to demonstrate error that the reasonable consumer is a person interested in acquiring the service and therefore necessarily interested in the cost of the service. Such a person would, it is said, look to the advertisements expressly for the purpose of finding out the cost of taking up the service. Such a person would have sufficient time to read the displayed writing in order to identify the cost and the subscription nature of the service. Moreover, the appellants assert that the reasonable consumer could not reasonably have expected to receive the content for nothing more than the cost of sending a text message.

61    Taking the advertisements in context, the appellants asserted before the primary judge that no contravention of s 53(e) arose as no representation was made of a one-off cost in the advertisement; the representations as to cost are not identified; the reasonable consumer would expect to pay something for the ringtone or game; nothing in the advertisements entitle the consumer to nominate the one-off cost; and a consumer, acting reasonably, who wished to determine the cost for the relevant service, would note the initial joining cost and ongoing subscription fee recited in the displayed writing.

62    At [79], the primary judge observed that these submissions as to cost seemed to ignore other reasonable responses to the advertisements which included a position a reasonable member of the class might adopt to the effect that the cost of entering the quiz or obtaining the ringtone or game was the cost of the text message. The primary judge observed that this approach was “admittedly most plausible in relation to the cost of entering the quiz”. Another response at [79] included that if the consumer did not consider what the cost would be, the consumer would “assume a reasonable cost for a one-off provision of a product or service – not that it was a subscription service with a sign-up fee and a daily or weekly fee that is not commensurate with the cost of the offered product or service alone”.

63    At [80], the primary judge seemed to accept the Commission’s proposition that there is a likely class of people within the general class who are misled by the advertisements “but do not text the number and therefore do not receive the subscription request message”. Those persons “are not disabused of any misapprehension engendered by the Advertisements”.

64    At [81], the primary judge made this finding:

I accept that, with the possible exception of the Quiz Advertisements, the viewers of the Advertisements would ordinarily have appreciated that the ringtones and games were not being provided for free. However, it is unlikely that they would have appreciated that, if they sent the SMS, the cost incurred was not simply a cost for the provision of the ringtone or game but a recurring cost, that cost being not just for the provision of the content but to sustain a subscription for that content and other services.

                                [emphasis added]

65    At [82], the primary judge found:

I accept that if the written text were read and understood by the consumer, there would be no relevant misrepresentation. The point is, however, that a consumer would be unlikely to read any of the text, let alone all of it, in the time of the Advertisements in circumstances where the size of the text was small and the consumer’s attention would be focussed on the visual images and the voiceover. The inclusion of a written disclaimer does not dispel the effect of the voiceover and the general nature of the Advertisements, which convey a clear message that a one-off text will purchase the offered product or, in the case of the Quiz Advertisements, put the viewer in a position of being able to win the offered prize.

                                [emphasis added]

66    At [82], the primary judge further found:

A first time viewer is unlikely to have regard to the writing at all. A repeat viewer, or one that is more astute, would have sufficient time to read the writing, which is legible and capable of being read, but this would require concentration and a disregarding of all the other messages, both visual and aural, being conveyed by the Advertisements. That is unlikely unless the viewer’s attention were directed to the written disclaimer. Such a viewer or one who was already aware of the possibility that more than the quiz/ringtone/game was being offered, or who was particularly astute, might read the writing and ignore the other messages. A reasonable viewer would not, in my view, do so.

67    At [83], the primary judge made these further findings concerning all of the advertisements:

Even if a particular consumer were aware and noticed the words “subscribe” or “subscription” in the Advertisements, a reasonable consumer in those circumstances would, in my view, still understand that he or she was paying for a specific product rather than for an ongoing subscription service for additional ringtones or games and other products. This is perhaps most clear in relation to the Quiz Advertisements. It is highly unlikely that a reasonable viewer would consider that the one-off chance of entering into a quiz would give rise to an open-ended subscription service. A person entering the quiz does not understand from the Quiz Advertisements that any opportunity is being offered other than that single opportunity to win the $100,000 prize. Further the Justin Bieber Advertisement makes no reference to a consumer receiving any ringtone other than Justin Bieber’s song One Time, or any other service. The voiceover in the Doodle Jump Advertisement says ‘subscribe to Doodle Jump, the mobile game’. It does not suggest that the consumer will receive any other product. The voiceover in the Space Invaders Advertisement states ‘subscribe and get the world’s most famous video game on your mobile’. It too does not suggest the consumer will receive any other product.

                                [emphasis added]

68    At [84], the primary judge found that the considerations described at [79] to [83] of her Honour’s reasons (described at [62] to [67] of these reasons) apply to a consideration of the contended contraventions of ss 52, 53(aa), 53(c) and 53(e).

69    At [85], the primary judge found that each advertisement is misleading, and likely to mislead, a viewer in contravention of s 52 of the Act.

70    As to the representation, the primary judge found at [86] that:

The Advertisements represent that a consumer responding to the Advertisements by text message will be charged no more than a one-off cost for a single mobile phone ringtone, video game or quiz.

71    At [86], the primary judge found that the true fact is that:

… the consumer who does respond and who moves through the double opt-in procedure signs up to a subscription service and is then charged an initial subscription fee and a weekly or daily subscription fee which is not terminated until the consumer sends a subsequent SMS.

72    At [87], the primary judge further finds as to the representation:

The representation in each of the Advertisements is that the price, although unstated, will only relate to the provision of one service when in fact the price relates to the provision of numerous services throughout the subscription.

                                [emphasis added]

73    At [87], the primary judge finds that the making of this representation “is false, or at the least misleading, and constitutes a contravention of s 53(e)”, by reason of the observations made about the advertisements by the primary judge.

74    At [88], the primary judge concludes that no contravention of ss 53(aa) or 53(c) of the Act had been established by the Commission. The primary judge observes that these subsections “are not, in my view, applicable to the representation made in the Advertisements” [emphasis added].

75    Accordingly, the primary judge made the following declarations on 15 June 2011 (together with related injunctive relief):

THE COURT

Declarations

1.    Declares that [Global One], from 14 February 2011 [which ought to have read 14 February 2010] to 22 May 2010, while engaged in trade or commerce, contravened ss 52 and 53(e) of the Trade Practices Act 1974 (the Act) by causing an advertisement promoting mobile telephone premium content services (Content Services) (by offering the song “One Time” by Justin Bieber as a mobile phone ringtone) to be published on television (the First Advertisement) which represented that any consumer responding to the First Advertisement by sending an SMS message would purchase a one-off service at a one-off cost when in fact the consumer was subscribing to a service with an initial sign-up fee and an ongoing subscription fee.

2.    Declares that [6G], while engaged in trade or commerce, contravened ss 52 and 53(e) of the Act by causing:

a.    an advertisement promoting content services (by offering entry into a mobile phone quiz game) to be published on television from 7 March 2010 to 17 April 2010 and from 30 May 2010 to 12 July 2010 (the Second Advertisement);

b.    an advertisement promoting content services (by offering the Space Invaders game to consumers on their mobile phone) to be published on television from 21 March 2010 to 24 April 2010 (the Third Advertisement); and

c.    an advertisement promoting content services (by offering the Doodle Jump game to consumers on their mobile phone) to be published on television from 25 May 2010 to 12 July 2010 (the Fourth Advertisement);

each of which represented that any consumer responding to the particular advertisement by sending an SMS message would purchase a one-off service at a one-off cost when in fact the consumer was subscribing to a service with an initial sign-up fee and an ongoing subscription fee.

76    By the Notice of Appeal dated 6 July 2011, Global One contends that the primary judge fell into error in concluding that in causing the broadcast of the Justin Bieber Advertisement a contravention of ss 52 and 53(e) arose. Global One contends that the primary judge erred in determining the contended contraventions by reference only to the content of the Justin Bieber Advertisement rather than by reference to the whole of the process including the double opt-in procedure by which Global One offered the service to consumers. Global One also contends that even by reference only to the content of the advertisement, the primary judge erred in concluding that Global One engaged in a contravention of s 52 or made a false or misleading representation with respect to the price of the subscription service within the meaning of s 53(e).

77    The same contentions are advanced on appeal by 6G in relation to each of the other advertisements.

78    The appellants summarise their submissions on contravention in this way.

79    First, even considered on their own, none of the advertisements were misleading or deceptive. Furthermore, the primary judge’s reasoning to the effect that a one-off service was being offered, even if correct, did not apply to the quiz advertisements.

80    Second, even if any one of the advertisements, considered in isolation, was misleading or deceptive, the conduct of the appellants should have been judged by reference to the whole of the sale process including the double opt-in process (and text messages) and if this had been done, on the Commission’s concession and the findings of the primary judge, the conduct of the appellants judged by reference to the whole of the sale process could not be considered to be misleading or deceptive.

81    Third, even if the advertisements were misleading or deceptive, the penalties imposed by the primary judge were unjustified in their severity. In particular, the penalties imposed failed to give adequate weight to the circumstance that due to the double opt-in procedure, no reasonable consumer who actually purchased the services was, or could have been, misled.

82    The question of pecuniary penalty is addressed later in these reasons.

83    Having had the benefit of looking repeatedly at each of the advertisements we make these observations about them.

84    First, repeated viewing of the advertisements for the purpose of seeing the images, hearing the voiceover and examining each of the component parts of each advertisement, pausing each advertisement to be better able to read and absorb the text, and making a deconstructed assessment of the relationship between those component parts is an entirely artificial analytical exercise. The primary judge rightly described the broadcast of the advertisements by television as an ephemeral communication to a consumer. The advertisements are transient communications that leave a dominant impression in the mind of a consumer. A consumer cannot turn to a fixed reference point to check or re-check messages conveyed by the advertisement. The consumer must deal with the cognitive cues triggered by the dominant impression the advertisement makes in the space of time the advertisement is screened.

85    Second, the consumer is drawn to the medium of television to watch the program not the advertisement. The advertisement in one sense is a distraction from the primary focus of the consumer in choosing to watch a particular program. Of course, advertisements are designed to capture the attention of the viewer in the periods when the program is broken by the period of the advertisements. In the appellants’ submissions reference is made in respect of each of the advertisements to the “featured” component of the advertisement. That there is a featured component is immediately obvious upon viewing each advertisement. No doubt, the featured component of the advertisement is designed to attract the attention of the viewer to the subject matter of each advertisement. The viewer is drawn to the featured component and engages with it. Obviously enough, during the course of engaging the viewer through the featured component of the advertisement, the advertiser seeks to convey a range of information. The method by which that might be done, the content of the information and the extent to which that information is actually brought to the attention of the viewer in the context of the attention the featured part of the advertisement commands, determines the dominant impression left upon the mind of the consumer.

86    Third, in the case of the Justin Bieber advertisement, the advertisement prominently features a very popular young artist singing a popular song. It depicts excited responses to the artist from followers or fans. It has a voiceover which in excited or emphatic terms encourages viewers to take up the opportunity or prospect of having, as a ringtone on their mobile phone, the Justin Bieber song One Time. The dominant impression of the advertisement is that by responding by text to the number displayed and flashing on the screen (as the key information to be remembered), the person can take up that opportunity. Although the word “subscribe” is used in the advertisement, a viewer acting reasonably could well understand that term as simply meaning “take up the opportunity” to obtain that song as a ringtone rather than a “subscription” for that ringtone and other services comprised of other music, videos, games and other things. The excited voiceover at the outset invites the viewer to subscribe for something, and that thing is said to be, “subscribe for One Time ringtone”. The text number for responses is then given, and what will result from doing so, is immediately described as “get Justin Bieber’s new hit on your mobile today”. The voiceover does not say “get Justin Bieber’s new hit and other music, videos, games plus more” by subscribing. Nor does it say: To get Justin Bieber’s new hit song One Time you must subscribe for additional music, videos, games plus more”. If the voiceover had gone beyond the virtue of “[getting] Justin Bieber’s new hit on your mobile today”, a reasonable consumer within the relevant field, might perhaps have thought that Justin Bieber’s new hit was but one part of a music and entertainment subscriber plan. In fact, the consumer cannot get just “Justin Bieber’s new hit on [his or her] mobile today” at all.

87    That is not what emerges from the dominant impression of the advertisement.

88    Fourth, we agree with the primary judge that in relation to the Justin Bieber advertisement the subscription details appear in small print and that the viewer is inevitably drawn to the images of the popular artist on the screen and the excited language of the voiceover. We also agree that it would be easy to miss or disregard the writing on the bottom of the screen and that if the viewer’s attention is adequately brought to it, it is highly unlikely that the viewer would read and absorb it rather than be drawn to and absorb the images of the featured attraction and the voiceover.

89    We also agree that the advertisement, taken as a whole, is directed to the featured component and a statement about the way in which the particular ringtone might be obtained. The dominant impression of this ephemeral advertisement is that by sending an SMS message to the advertised number the consumer can take up the opportunity to have Justin Bieber’s song as the ringtone for the consumer’s mobile phone at a cost which does not involve an ongoing subscription cost for that opportunity or a subscription (and thus also a subscription cost) for bundled other music, videos, games or other things.

90    Put simply, the advertisement featuring Justin Bieber’s song as a ringtone operates as a hook to induce a consumer to respond to the advertisement and sign up for it in circumstances which actually involve an ongoing subscription for that ringtone and other music, videos, games or other things, which is not made plain by the dominant impression the advertisement leaves on the mind of a consumer acting reasonably.

91    As to the Doodle Jump and Space Invaders Advertisements, the same impression is given by these advertisements as that given by the Justin Bieber Advertisement. Each advertisement is accompanied by an excited voiceover that gives featured emphasis to the consumer’s opportunity to take up and be able to play on their mobile phone the particular game “Doodle Jump” and the particular game “Space Invaders”.

92    We agree with the primary judge’s observation that each of these advertisements gives the strong impression by their manner and form of presentation that a particular feature is being presented coupled with a particular opportunity: You can have this song as a ringtone; You can have this game to play on your mobile phone. The essential impression is one of offering a particular feature not a feature bundled with other things.

93    We agree with the observations of the primary judge that it is unlikely that a consumer would have appreciated that if they sent an SMS to the advertised flashing number in response to the advertisement, the cost incurred of acquiring the featured thing was not simply a single cost for that thing (ringtone or game) but a recurring or subscription cost for the featured thing, and also a subscription for other services. We also agree with the observations of the primary judge that a consumer would be unlikely to read and absorb, in the course of the publication of the advertisement, the text which is said to bring to the attention of the consumer all of the relevant matters. We agree that in circumstances where the size of the text displayed on the screen is small and the thrust of the advertisement is to focus the consumer’s attention on the visual images reflecting the featured opportunity, that is, the particular ringtone or game, the clear message conveyed by the Justin Bieber, Doodle Jump and Space Invaders Advertisements is that a responsive text will result in a purchase of the offered product not a subscription to that product let alone a subscription to that product coupled with weekly charges for bundled other products.

94    In the case of the Quiz Advertisements, the feature of each advertisement is a consumer’s opportunity to participate in the possibility of winning $100,000 by responding to the particular question. We agree with the primary judge that the strong impression conveyed by the quiz advertisement is that a consumer is given a single opportunity to be in the pool of persons responding to the quiz question which carries with it the opportunity to win a $100,000 prize. We agree with the primary judge that the quiz advertisement does not convey an impression that the consumer is being offered an opportunity to take up a subscription with enduring weekly subscription charges for ongoing participation in multiple quiz questions over time. The advertisement effectively says: Here is your chance to be in the mix for the possibility of winning a large prize and you can do that by answering this question and responding to the text number now appearing on the screen.

95    The simple fact is that each advertisement is plainly designed to operate as a hook to induce a consumer to respond to the advertisement and sign up for a particular featured opportunity in circumstances which actually engages an ongoing subscription for that opportunity and a subscription for bundled other offerings, which is not made plain by the dominant impression the advertisement leaves on the mind of an ordinary consumer acting reasonably in responding to the advertisement.

96    The real question is whether the double opt-in procedure operates in such a way that the misleading impression created in the mind of an ordinary consumer acting reasonably arising out of having seen each advertisement, is dispelled by the particular sequence of exchanges put in place by the appellants. That sequence involves attracting the responding consumer so as to provoke a text message to the flashing number on the screen. A computer-generated response is then sent to the responding consumer which seeks confirmation from the consumer of his or her acceptance of the service by asking the consumer to send a text “YES” or a particular phrase to a particular number. The appellants contend that the quality of their conduct can only be determined by properly taking into account this sequence of exchanges. They say that the consumer is again told of the subscription quality of the service, the cost and the recurring cost and in the face of that information the consumer, in effect, has to say yes or no.

97    There are two particular difficulties with this approach.

98    First, we agree with the primary judge that the essential conduct is publication of the advertisement because it is publication by broadcast that seizes the attention of the consumer and provokes the consumer’s engagement with the offering. That publication is misleading. Moreover, it is plainly misleading. Each step along the continuum after that point involves a consumer who has been misled. Second, the computer-generated response to the consumer responding to the advertisement has the character of operating as confirmation to the consumer that he or she is recognised by the service provider as a person who wants what was offered in the advertisement, namely, the particular ringtone, the particular game or an opportunity to answer a particular question which might throw up the chance of winning a $100,000 prize. The consumer responds so as to confirm the choice already made on the basis of a misleading advertisement. The consumer is not making a fresh evaluation. Once the consumer sees that the service provider has recognised that the consumer is a person who wants what was offered in the advertisement, the consumer gives the necessary short confirmatory response by text of either “YES” or the relevant phrase and the acceptance of the advertised service offering occurs.

99    In that sense, there is no basis for concluding that the post-publication steps in the double opt-in continuum dispels the misleading or deceptive conduct arising out of publication of the advertisements.

100    The issues in relation to cost are the subject of specific findings by the primary judge at [86] as to representations. As already mentioned the primary judge found that each advertisement contains a representation that a consumer responding to one of the advertisements will be charged “no more than a one-off cost for a single mobile phone ringtone, video game or quiz”, and at [87] the primary judge found that each advertisement contains a representation that the price, although unstated, will only relate to the provision of one service. Neither representation was found to be true for the reasons already discussed.

101    The appellants contend that none of the advertisements contains an incorrect representation as to cost. In particular, no representation is made to a consumer that the consumer will incur a one-off cost in taking up the offered service. Nor is there an express representation that a consumer will be charged no more than a one-off cost for a single mobile phone ringtone, video game or quiz. Nor is there a representation that the price a consumer will be required to pay should the service be taken up is a price that only relates to the provision of one service.

102    The appellants say that the Commission has been unable to point to any express representation in any of the advertisements to these effects and that in order for the primary judge to find representations the subject of the findings at [86] and [87] the primary judge has relied upon unstated implied representations which are inconsistent with the express writing displayed on the screen and the express information in the computer-generated response to a consumer responding to the advertisement.

103    In the course of oral argument, counsel for the appellants put the contention in this way (at T 8, ln 36): “the key part of our argument comes down to the observation that absence of reference to something is not a representation that the negative exists”.

104    The difficulty however is this.

105    Whilst it is true that the small writing displayed on the screen setting out the joining cost and the weekly recurrent cost until cancellation by text is correctly stated (and correctly stated in the computer-generated response to a consumer’s text); no express representation is made that the service offering involves a one-off cost or once-only cost; and no express representation is made that only the featured ringtone, game or quiz question opportunity comprises the service offering and no other subject matter, the dominant impression made by each advertisement by the images, voiceover and manner of presentation of each advertisement is that a featured thing is offered or pushed at the consumer, and the opportunity to take up that particular feature might be seized by immediately texting a response to the flashing number. Correspondingly, the reasonable consumer would expect there to be a cost for taking up the feature. However, two factors are important. First, since the consumer has seen a particular single feature extolled in each advertisement, the consumer acting reasonably could well think that the corresponding cost is a single cost for a single thing, not a continuing weekly subscription cost until cancellation. Second, the dominant impression of the advertisement is that the cost is a small single cost for a single thing and the consumer is encouraged by the advertisement to believe that the feature might be taken up by simply responding by sending a text to the flashing number.

106    The misleading quality of the advertisement, on the question of cost, is the failure of the advertiser to draw the consumer’s attention to the true nature of the recurrent subscription cost for the feature and other things bundled with the feature. Incorporating small but accurate text into the advertisement does not have the effect of dispelling the plain and dominant impression created by the advertisement.

107    The appellants also contend that the advertisements are neither misleading nor deceptive on the footing that the relevant class is a cohort of consumers interested in taking up the relevant service and the members of that cohort are astute to the use of such features and related other ringtones, video games, quizzes and various amusement applications for mobile phones such that they would be looking for the cost of the application. They would seek out the small writing and look to the information on cost rather than act on simply the broadcast of each advertisement.

108    Whether impugned conduct conveys the making of the representation is always a question of fact to be determined having regard to all of the contextual circumstances within which something was said or done. When that assessment is being made in the context of conduct said to involve representations to the public at large (or a section of the public) such as prospective buyers of ringtones, games or similar applications, ss 52 and 53(e) contemplate the effect of the impugned conduct on reasonable members of the relevant class of buyers (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 per Gibbs CJ at 199) or ordinary members of that class (Parkdale per Mason J at 204-205) (“Parkdale”). In order to test whether a misconception has arisen or might arise among members of the relevant cohort by reason of the impugned conduct, the inquiry is to be made notionally of the hypothetical individual excluding “assumptions by persons whose reactions are extreme or fanciful”: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at [105] (“Campomar”). The question is, “whether the misconceptions, or deceptions, alleged to arise or to be likely to arise are properly to be attributed to the ordinary and reasonable members of the classes of prospective purchasers”: Campomar at [105]. In determining whether a contravention has occurred, the focus of the inquiry is whether a not insignificant number within the class or cohort have been misled or deceived or are likely to be misled or deceived by the conduct, whether in fact or as a matter of inference: Hansen Beverage Co v Bickfords (Aust) Pty Ltd (2008) 171 FCR 579 at [46], per Tamberlin J and at [66] per Siopis J; ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 380 and 381 per French J. In ConAgra, French J observed that the notion of “insignificant” identified the threshold of public awareness below which such conduct is not misleading. His Honour observed that the term “insignificant” in this formulation is thus “normative” but not inappropriate in understanding the scope of the prohibition upon misleading conduct which is directed to consumer protection. The issue, however, is not whether the impugned conduct simply causes confusion or wonderment but whether the conduct is or is likely to mislead or deceive: Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 201 per Deane and Fitzgerald JJ. The proper approach to determining whether a person has engaged in conduct in contravention of ss 52 and 53(e) involves normative considerations of whether a not insignificant number of persons within the cohort being ordinary or reasonable members of the class of prospective purchasers would be or would be likely to be misled by the impugned conduct: Peter Bodum A/S v DKSH Australia Pty Ltd (2011) 280 ALR 639 at [203] – [208]; National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 61 IPR 420 at [23], [70] and [71].

109    It is also important to appreciate that this case is not a product get-up case. It bears no relationship to a case like Parkdale in which consumers had an opportunity to closely examine an article of furniture retailing at a price of $1,500 and prominently displayed on a showroom floor where the consumer could look closely at labels and tags which might have had the effect of dispelling, upon reasonable examination of the physical article, first impressions of similarity between particular products.

110    The primary judge properly identified the principles to be applied in determining whether the contended contraventions had been made out. No error is demonstrated.

111    In this case, the advertisements extol the virtue of a mobile phone user taking up the opportunity to have Justin Bieber’s song as the ringtone for his or her mobile phone or the opportunity to be able to play a computer game exhibiting the features of the Doodle Jump or Space Invaders games, or the possibility of participating in an answer to a question which might put the mobile phone user in the mix for the possibility of winning a substantial quiz prize. The relevant class or cohort for the purposes of determining the effect of the impugned conduct is members of the general public who subscribe for mobile telephone services and whose interest is likely to be attracted by advertising directed to features for mobile phones such as ringtones, games, participation in competitions and like applications, and to the possibility of taking up one of the advertised applications. Such a consumer within the cohort would expect there to be a cost associated with taking up one of these applications. However, a reasonable member of the class, or more particularly, a not insignificant number within the class or cohort, would be likely to act on the footing as described at [106]. A not insignificant number within the class or cohort acting reasonably, would not be likely to seek out the pricing information in the way contended for by the appellants but would be likely to act in the way described at [106].

112    It follows that no error has been demonstrated in the findings of the primary judge in relation to the contraventions of ss 52 and 53(e).

Pecuniary penalty

113    Section 76E(1)(a)(ii) provides relevantly that if the Court is satisfied that a person has contravened a provision of Division 1 of Part V (other than s 52) the Court may order the person to pay such pecuniary penalty in respect of each act or omission constituting a contravention as the Court determines appropriate. Section 53(e) is a provision within Division 1 of Part V. By s 76E(3), the pecuniary penalty is not to exceed, in the case of a body corporate, 10,000 penalty units. By s 4AA(1) of the Crimes Act 1914 (Cth) a penalty unit means $110. Accordingly, the maximum pecuniary penalty in respect of each act or omission constituting a contravention of s 53(e) is $1.1 million.

114    The advertisements in issue in these proceedings were broadcast during the period 14 February 2010 to 12 July 2010. Section 76E was introduced into the Trade Practices Act by the Trade Practices Amendment (Australian Consumer Law) Act (No. 1) 2010 and commenced operation on 15 April 2010. Pecuniary penalties may only be ordered in relation to contraventions that took place on and from 15 April 2010. Contraventions in respect of each advertisement occurred on and after that date. From 1 January 2011, s 76E became, with amendments, s 224, Division 1, Part 5-2 of Schedule 2 to the Competition and Consumer Act 2010 (Cth). As noted at the outset however, s 7(1) of Schedule 7 (“Transitional matters”) of the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 (Cth) provides that the provisions of the Trade Practices Act continue to govern the conduct in issue in these proceedings rather than the provisions of the Competition and Consumer Act 2010 (Cth) which commenced operation from 1 January 2011.

115    Section 76E(2) provides that in determining the appropriate pecuniary penalty in respect of a contravention of a provision of Division 1 of Part V (and in this case, s 53(e)) the Court must have regard to all relevant matters including:

(a)    the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission; and

(b)    the circumstances in which the act or omission took place; and

(c)    whether the person has previously been found by the Court in proceedings under Part VC or this Part [Part VI – Enforcement and remedies] to have engaged in any similar conduct.

116    Section 76E is in similar terms to s 76(1) of the Trade Practices Act. That section confers power on the Court to order a person to pay a pecuniary penalty to the Commonwealth if the Court is satisfied that a person has contravened a provision of Part IV. Part IV contains prohibitions upon restrictive trade practices. Part V is directed to the protection of consumers. In determining the appropriate pecuniary penalty, s 76(1) directs the Court to have regard to, in essence, the same factors as those identified under s 76E(2) with the exception of a particular cross-reference that is not material for present purposes.

117    In Parkdale, Mason J said this at 204:

The object of Pt V is to protect the consumer by eliminating unfair trade practices, just as the object of Pt IV is to promote competition by eliminating restrictive trade practices. … The statutory policy, as it seems to me, is that the interests of a consumer of goods or services will best be served when manufacturers compete vigorously without adopting restrictive practices and observe prescribed standards of conduct in their dealings with consumers.

                                [emphasis added]

118    That view of Part V and the legislative relationship between Parts IV and V of the Trade Practices Act identified by Mason J was adopted by the Court in Campomar at [97].

119    Section 76E is directed to the imposition of a pecuniary penalty, having regard to all relevant matters, arising out of a corporation’s failure to “observe standards of conduct” prescribed by Part V in its dealings with consumers, directed to the elimination of unfair trade practices. Although s 76E and s 76(1) serve different purposes, the principles to be applied (apart from the mandatory inclusive considerations at s 76E(2)) in the Court’s assessment of an appropriate penalty involve, in substance, the same considerations (Australian Competition and Consumer Commission v Dimmeys Stores Pty Ltd [2011] FCA 372 at [27]; Australian Competition and Consumer Commission v MSY Technology Pty Ltd (No. 2) (2011) 279 ALR 609 at [68] and [69]; Australian Competition and Consumer Commission v Gourmet Goody’s Family Restaurant Pty Ltd [2010] FCA 1216) although there are some important differences, expressly relevant to contraventions of Part IV. Section 76(1A) directs attention to particular matters relevant to particular sections within Part IV of the Act and s 76(5) gives particular emphasis to the annual turnover of a corporation for the purposes of determining an appropriate pecuniary penalty for a contravention of a provision of Part IV.

120    In Trade Practices Commission v CSR Limited (1991) ATPR 41-076 at 52,152 to 52,153, French J identified the following factors as relevant to the assessment of a pecuniary penalty under s 76:

(a)    the nature and extent of the contravening conduct;

(b)    the amount of loss or damage caused;

(c)    the circumstances in which the conduct took place;

(d)    the size of the contravening company;

(e)    the degree of power it has, as evidenced by its market share and ease of entry into the market

(f)    the deliberateness of the contravention and the period over which it extended;

(g)    whether the contravention arose out of the conduct of senior management or at a lower level;

(h)    whether the company has a corporate culture conducive to compliance with the Trade Practices Act as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention; and

(i)    whether the company has shown disposition to cooperate with the authorities responsible for the enforcement of the [Trade Practices Act] in relation to a contravention.

121    These considerations have been approved by the Full Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 292 to 294 per Burchett and Kiefel JJ (with Carr J agreeing) and J McPhee & Son (Aust) Pty Ltd v Australian Competition and Consumer Commission (2000) 172 ALR 532 at [150 ff], per Black CJ, Lee and Goldberg JJ. In Australian Competition and Consumer Commission v MSY Technology Pty Ltd (supra) Perram J observed at [69] that the matters described by French J in CSR and approved in the authorities just mentioned, apply to decisions on penalties under s 76E with two exceptions. The first exception concerns the degree of market power of the contravener as evidenced by its market share and ease of entry into the market (see CSR at 52,153). The second exception concerns the relevance of the reference in NW Frozen Foods and J McPhee & Son to the effect of the functioning of the market and other economic effects of the contravening conduct. Perram J accepted that these factors might “conceivably” have some application in connection with contraventions of Part V but because these considerations seem particularly adapted to questions arising in relation to anti-competitive conduct for the purposes of Part IV, those matters seem to have little to say about standards of conduct of a corporation in its dealings with consumers.

122    At [111], the primary judge accepted those observations of Perram J.

123    We agree, in general terms, with those observations.

124    However, because s 76E(2) directs the Court to have regard to all relevant matters including the particular matters identified in that subsection, the degree of market power of the contravener may well remain an important consideration in the determination of an appropriate pecuniary penalty under Part V and particularly in connection with the deterrence notions inherent in the assessment of an appropriate penalty. We agree that questions concerning the ease of entry into a market, questions of contestability and the dynamics of the functioning of a market are matters peculiarly relevant to contraventions of Part IV in the relevant circumstances of any particular contravention under that Part and not considerations, in any obvious sense, adapted to questions arising under Part V.

125    At [112], the primary judge accepted that the principal purpose in assessing a pecuniary penalty is deterrence both in the specific sense of deterring future conduct on the part of the contravener and deterrence in the broader sense of discouraging other corporations from engaging in like conduct. The primary judge accepted that an “appropriate” pecuniary penalty must be struck at an amount which discourages a corporation from simply treating the penalty as an incremental cost of doing business. At [109], the primary judge noted that the parties addressed submissions on penalty to these topics:

●    the size of the contravening company;

●    the degree of market power it has as evidenced by market share and ease of entry into the market;

●    the deliberateness of the contravention and the period over which it extended;

●    whether the contravention arose out of the conduct of senior management or at a lower level;

●    whether the company has a corporate culture conducive to compliance with the Act;

●    whether the company has shown disposition to co-operate with the Commission;

●    whether the contravening company has engaged in similar conduct in the past;

●    the effect on the functioning of the market and other economic effects of the conduct;

●    the financial position of the contravening company; and

●    whether the conduct was systematic, deliberate or covert.

126    As to those matters (apart from the exceptions noted by Perram J and adopted by her Honour) the assessment made by the primary judge of the appropriate penalty and the findings of fact made by her in relation to the financial position of the appellants was as summarised in the following paragraphs.

Size of the contravening company

127    Global One derived revenue in the financial year ending 31 December 2010 of $10.1m; sustained a loss of $358,194.00; had net assets of $2.9m; and employed 42 people. 6G made a loss of $518.00 in that financial year; had net assets of $510.00 and employed no people. Revenues and expenses of 6G are derived or borne by Global One. Each company is a wholly owned subsidiary of MobileActive. That company is identified in the Justin Bieber and Doodle Jump Advertisements. The quiz advertisements make reference to MobileGold. The Chief Financial Officer and Company Secretary of MobileActive, Mr Jeronimo is also the CFO of Global One and 6G. The CFO of MobileActive, Mr Thorpe is a Director of both Global One and 6G. MobileActive’s revenue in the financial year ending 30 June 2010 was in excess of $12m. Its net assets were $1.8m.

128    MobileActive is not said to have contravened the Act. At [119], the primary judge accepted that the size of the parent entity is relevant to the capacity of Global One and 6G to meet a pecuniary penalty subject to the considerations set out in Schneider Electric (Australia) Pty Limited v Australian Competition and Consumer Commission (2003) 127 FCR 170 at [49] per Merkel J (Black CJ and Sackville J agreeing). At [119], the primary judge observed that MobileActive was involved in the conduct of Global One and 6G by the use of its name and the actions of its officers. At [120], the primary judge observed that while punishment by pecuniary penalty is not imposed on the parent entity, the size of the parent entity cannot be ignored when assessing the penalty that should be imposed on the subsidiary. The primary judge accepted the observations of Finkelstein J in Australian Competition and Consumer Commission v ABB Transmission & Distribution Limited (No. 2) (2002) 190 ALR 169 at [40] that if it were otherwise, corporations could easily organise their affairs so that if found to have contravened a provision of the Act, the penalty would be kept to a minimum.

129    At [122], the primary judge accepted that the size of MobileActive should be taken into account in assessing the appropriate penalty to be imposed on Global One and 6G “both for the purposes of deterrence and for MobileActive’s ability to pay in circumstances where … the financial position of the subsidiaries indicates that both of those companies may not have the direct ability to pay a substantial penalty”.

The deliberateness of the contravention and the period over which it extended

130    At [123], the primary judge accepted that there is no evidence to suggest that Global One or 6G deliberately contravened the Act. The period of the contraventions is 14 February 2010 to 12 July 2010. In that period the advertisements were screened in blocks of up to 14 weeks. At [125], the primary judge found that except for free screenings over which no control was exerted by the companies, the advertisements were screened at times determined by Mr Robertson. Those times were generally when children or younger viewers would be expected to be watching television, that is, before and after school, on weekends and during the day in the school holiday periods. At [127], the primary judge observed that the “inherent effect” of the advertisements is to be determined by reference to the subject matter of each advertisement and its “attraction to different segments of the viewing public”. The primary judge noted the contention of the Commission that the advertisements were “particularly egregious” because they were aimed at young consumers and especially so in the case of the Justin Bieber Advertisement and the advertisements for the “Doodle Jump” and “Space Invaders” games. At [128], the primary judge noted the submission of Global One and 6G that “there is no evidence that any consumers were misled, let alone any consumers under the age of 18”. The primary judge at [128] observed:

That may be the case but there is also evidence that a substantial proportion of the complaints, though the total number was small, was in respect of purchases by under 18 year olds. Global One and 6G accept that the Advertisements would have been seen by at least some children under 15 years of age … [and] Mr Robertson accepted that a Justin Bieber ringtone would also be of appeal to younger viewers.

131    At [129], the primary judge accepted that the evidence does not establish that Global One and 6G deliberately targeted younger viewers. The primary judge observed at [129]:

However, Global One and 6G knew or reasonably ought to have appreciated the impact of the Advertisements, and the Justin Bieber Advertisement in particular on young consumers. While I accept that television advertisements are likely to be seen by all age groups at any hour, it is worth noting that the screening times of the Advertisements, other than perhaps the Quiz Advertisements, were at a time when school age children would be likely to be watching television.

Conduct of senior management

132    At [130], the primary judge observes that the advertisements were arranged and approved by Mr Robertson, the head of marketing and licensing for Global One.

A culture of compliance

133    At [131], the primary judge observes that no evidence was available as to whether or not Global One or 6G has a corporate culture of compliance with the Act.

Cooperation with the Commission

134    The primary judge accepted that Global One and 6G had cooperated with the Commission.

Similar conduct in the past

135    The primary judge observes that there is no evidence to suggest that Global One, 6G or MobileActive has engaged in similar conduct in the past.

The financial effects

136    At [134], the primary judge observes that while broader economic effects in the market are not relevant for the purposes of s 76E, “the financial effect on the consumer and the contravener are relevant”.

137    At [135], the primary judge observes that there is no evidence that a consumer suffered any loss by reason of the conduct of Global One or 6G and there is no evidence that any of the consumers who subscribed to the services following the double opt-in procedure “were dissatisfied or asserted loss or damage”. The primary judge observes that “[t]hose who complained had their subscription fees refunded”. Having regard to these considerations, the primary judge observes that “the actual amount of any loss or damage caused by the contravening conduct cannot be quantified”.

138    At [135], the primary judge notes the observations of Perram J at [79] in MSY Technology to the effect that where no evidence has been led by the Commission of any harm suffered by reason of the contravening conduct, the respondents are entitled to be sentenced on the basis that the conduct has not caused harm. Perram J regarded this approach as a “commonsense” one. At [135], the primary judge agreed with those observations adding the qualification that such an approach “may not be the case where loss or damage is established but the extent of it cannot be quantified accurately”.

139    At [135], the primary judge observes that in the present case, “the Commission has not led evidence of any loss or damage on the part of any consumer”.

140    At [136], the primary judge notes that Global One and 6G generated $58,064.50 in revenue in response to the advertisements. The parties accepted that the following table sets out the number of subscribers attracted to the services by the advertisements, the average number of days consumers subscribed to the mobile telephone premium content services and the number of occasions on which consumers were successfully billed for the services.

141    At [137], the primary judge seems to accept that Global One and 6G derived no profit from the subscriptions from consumers. The primary judge accepted that the fact of no financial gain by either respondent is a relevant factor in the assessment of the penalty although not an answer to the imposition of a penalty.

The financial position of Global One and 6G

142    At [138], the primary judge notes that Global One contends that it is not in a strong financial position and that 6G contends it has no capacity to pay any pecuniary penalty. At [139], the primary judge observes that although Mr Jeronimo put on several affidavits in the proceeding, there is no evidence that either Global One or 6G would be unable to pay any pecuniary penalty.

143    At [140], the primary judge refers to the observations of the Full Court in Australian Competition and Consumer Commission v High Adventure Pty Ltd (2006) ATPR 42-091 to the effect that notwithstanding the financial difficulties a contravener might be confronting, an appropriate penalty ought to be imposed in order to serve the public interest in deterring future contraventions. The focus is not simply deterrence of the particular respondent. At 44,564 the Full Court in High Adventure observed that the possibility of liquidation of the respondent entity must not prevent the Court from imposing an appropriate pecuniary penalty otherwise “the important object of general deterrence will be undermined”. The primary judge accepted that statement of principle but also observed at [141] that “[i]n any event, in light of my comments about the parent company of Global One and 6G, the financial position of MobileActive should be taken into account in assessing the penalty to be imposed on Global One and 6G and their ability to pay such a penalty”.

Systematic, deliberate or covert conduct

144    The primary judge accepted that there is no evidence to suggest that the conduct of either company was systematic, deliberate or covert.

The quantum of the penalty

145    The primary judge accepted that the publication of each of the advertisements ought to be treated as a single contravention (with the quiz advertisements treated as one contravention). There are thus four contraventions. Each contravention attracts a pecuniary penalty of $1.1m with the result that the maximum possible penalty is $4.4m.

146    At [143], the primary judge notes that the Commission did not contend that the appropriate penalty is at the upper end of the maximum amount but that a penalty of approximately 10% of the maximum penalty for each contravention is an appropriate amount, that is, a penalty in the range of $100,000 to $125,000 for each contravention. The Commission urged upon the primary judge the notion that anything less would be meaningless in the context of a company of the size of MobileActive. At [144], the primary judge observes Global One and 6G’s fundamental contention that there is no evidence to suggest that those companies deliberately set out to mislead the public and nor is there anything “incorrect in the Advertisements”. The companies contended that the fact that the relevant information was not sufficiently prominent to impress itself on the mind of a viewer, is simply a matter of judgment and that the true measure of the impact of any misleading conduct is the period between the viewer seeing the advertisement and the viewer receiving the double opt-in text message explaining “the actual nature of the subscription service being offered”. The companies contended that this would be no more than a few minutes.

147    The primary judge also notes the observations of the Commission concerning a speech given by the Chairman of the Commission on 13 March 2009 emphasising that advertisements featuring busy distracting visual images with hard to read fine print raised significant industry concerns about the tendency to confuse consumers about the services they might actually be getting when sending a responsive text message.

148    At [147], the primary judge notes the Commission’s submission that a total penalty of $400,000 to $500,000 is consistent with the totality principle and ensures that the aggregate penalty is just and appropriate.

149    At [148], the primary judge said this:

I have taken into account all the above matters. It is important that Global One and 6G and other providers understand that “technical compliance” by the provision of required information may still result in advertisements that are false, misleading or deceptive, or are likely to mislead or deceive. The obligation is on the provider properly to consider the content of the advertisement. … It may, as Global One and 6G submit, be a matter for judgment but, in my view, it is not reasonable to assume that the viewers of the Advertisements would have understood that they were being offered a subscription service rather than the purchase of a product at a one-off cost. It was not reasonable to rely on the writing in the Advertisements in the context of the small size of the writing, the length of time that each of the Advertisements was shown, the visual images, the voiceover and the subject matter. This is particularly so when the viewers of the Advertisements were likely to be under 18 years of age.

150    At [149], the primary judge notes that the Commission did not dispute that 6G did not have the means to pay any substantial penalty although no such submission had been made for Global One. At [149], the primary judge observes that while it is not appropriate to penalise MobileActive, it is the case that Global One and 6G are wholly owned subsidiaries of a substantial company and that in imposing a penalty, the Court must take into account the nature of the contraventions and the importance of general deterrence. At [150], the primary judge regarded the Justin Bieber Advertisement as “the most egregious” of the advertisements and imposed a penalty of $150,000 on Global One. In the case of the Quiz Advertisements, Space Invaders Advertisement and the Doodle Jump Advertisement, the primary judge imposed a penalty on 6G of $75,000 for each contravention constituting a penalty of $225,000.

151    The appellants approach the question of whether the primary judge fell into error in determining an appropriate penalty, by first isolating the extent of the false or misleading conduct in issue and then calling into question the exercise of the sentencing discretion on the footing that either the discretion miscarried as it operated upon an “irrelevant” class of viewers, or the penalty imposed was “overly harsh”. As to the first, the appellants contend that the primary judge segmented the conduct into two classes of viewers.

152    First, those viewers who saw the advertisements, were misled, responded by text and continued to be misled until a very short time after their responsive text was sent, received the explanatory double opt-in text explaining away the misconception.

153    Second, viewers who saw the advertisements, were misled, did not send a responsive text, did not receive the explanatory double opt-in text and remained in a state of induced misconception until the broadcast advertisement faded from their memory.

154    The appellants say the second class of viewers is irrelevant to any question of contravention as those viewers simply ignored the advertisement and did not act upon it, and as to the first group, the extent of the misleading conduct is measured merely by the short interval between the consumer’s responsive text to the advertisement and the receipt of the explanatory double opt-in text dispelling any misconception.

155    The appellants contend that the operative false or misleading conduct is therefore trivial and not supported by any evidence of consumer detriment.

156    The primary judge, however, did not segment the conduct in this way and the findings are not consistent with segmentation of this kind. The primary judge found that the broadcast of each advertisement with the dominant impression it made (as found) containing the representations (as found) was “the relevant conduct” and although a consumer who read the content of the double opt-in message would be disabused of the dominant impression created by each advertisement, ordinary and reasonable consumers acting in response to any of the advertisements could well send a confirmatory acceptance of the service offering continuing to act on a misconception created by the advertisement. In any event, the primary judge concluded that the post-broadcast steps did not dissolve the false or misleading character of the anterior broadcasts.

157    The appellants say that the primary judge failed to give adequate weight to the factors that neither appellant deliberately set out to mislead the public; the advertisements themselves contained no express misrepresentation; any misapprehension was transient and did not result in actual detriment to any particular consumer; the number of consumers were small in number; the contravention as found was based upon a failure to sufficiently disclose the pricing mechanism; and, the appellants made no profit from their conduct.

158    Further, the appellants contend that the primary judge was led into error by the Commission by placing emphasis upon the effect of the advertisements upon children or young viewers. The appellants accept that the advertisements were shown in some timeslots where audience members would have included children including some children under 15 years of age and that if the advertisements contained the misconceptions found, those same misconceptions as held by an ordinary and reasonable adult viewer, could also have been held by viewers under the age of 18. Nevertheless, the advertisements were broadcast, it is said, to a general population and giving particular emphasis to these younger cohorts gives inappropriate emphasis for the purposes of assessing an appropriate penalty, and fails to have regard to the constraints upon the conduct of younger cohorts such as limitations upon purchase entitlements and the capacity to ensure that “content services of the type sold by the appellants were blocked”.

159    The appellants also say that the primary judge was led into error in being encouraged to impose a penalty of approximately 10% of the maximum amount of the penalty and that selecting a mathematical formula of that kind is apt to cause the discretion to miscarry because it discourages the primary judge from weighing and evaluating the statutory factors and, in particular, the application of the principle of proportionality.

160    As already mentioned, the appellants also say that on any view, the conduct in question in these proceedings grounding the contraventions is “trivial”.

161    Finally, the appellants make submissions in relation to the operation of the Code registered with the Australian Communications and Media Authority (“ACMA”) pursuant to s 117 of the Telecommunications Act 1997 (Cth) which took effect from 1 July 2009. The Code applies to activities of suppliers in relation to mobile premium services and the object of the Code is to establish appropriate community safeguards and customer service requirements for mobile premium services. In these proceedings, the parties accepted that the Code applies to Global One and 6G’s services as advertised. The primary judge observes at [56] that the Code is not relevant to the alleged contraventions under the Trade Practices Act but to orders consequential upon a proven contravention of that Act. The appellants say that the Commission’s references to the Code in the context of penalty are irrelevant. So too are the Commission’s references to a speech made by the Chairman of the Commission. The appellants say that there is no evidence that they were aware of the Chairman’s statements. They say that, in any event, the sole question to be determined is a question of law concerning the exercise of the sentencing discretion according to established principle and not by reference to pronouncements by the Commission in non-curial forums. The appellants say that the material published by the Commission, properly analysed, could not possibly have told the appellants that advertisements in the form broadcast coupled with the double opt-in procedure involved a contravention of s 53(e).

162    For our part, we can find no error of principle in the approach adopted to the exercise of the sentencing discretion by the primary judge. The primary judge has taken into account all of the factors reflected clearly in her reasons. The conduct in question is not trivial. Although views might differ about the amount of a penalty in a particular case, the question is not whether members of the Full Court standing in the shoes of the primary judge would have imposed a penalty of the order imposed by the primary judge but whether the primary judge has fallen into error in either identifying the relevant principles to be applied or in imposing a penalty which is not, for the purposes of the statute, the appropriate penalty in all the circumstances, having regard to settled sentencing principles. The primary judge has not simply applied a mathematical formula as suggested by the appellants. The primary judge has taken into account the multiplicity of factors discussed in her reasons. Nor has the primary judge failed to strike a penalty which reflects proportionality in the amount of the penalty having regard to the contraventions, the policy of the Act and the principles governing the determination of an appropriate pecuniary penalty. The primary judge has weighed each of the factors described at [125]. A proper reading of her Honour’s reasons on the question of penalty does not suggest that the primary judge has given particular weight to statements by the Commission. The primary judge has looked at all of the identified factors relevant to the exercise of the discretion and has determined a penalty having regard to those factors and the quality of the conduct and contextual circumstances.

163    As to the younger cohorts, the primary judge has had regard to the viewing audience likely to see the advertisements during the periods each advertisement was broadcast. The primary judge has taken into account the proposition that some viewers under 18 and some viewers under 15 would have been likely to have seen the advertisements. No greater emphasis is given to the younger cohorts than weighing those circumstances in the balance. The primary judge has given some greater emphasis to that factor in the context of the Justin Bieber advertisement having regard to the popularity of that young artist with a younger audience and in particular girls under the age of 15.

164    For all these reasons, we are not satisfied that the primary judge fell into error in the way contended. The appeal must be dismissed with costs.

165    It is not necessary to deal with the cross-claim of the Commission in relation to s 53(aa) or s 53(c).

Associate:

Dated:    14 September 2012