Carsales forces Carsguide to auto correct

Car classifieds website Carsales has triumphed in its legal battle against News Corp-owned rival Carsguide.

The Victorian Supreme Court today ruled that Carsguide’s recent advertising campaign, which made a number of allegations about Carsales’s business practices, was misleading and likely to deceive consumers.

Carsales initiated legal action earlier this year, arguing its rival made “grossly misleading” representations in a series of television and radio advertisements.

In particular, the website took issue with the allegation it sold its customers’ contact details to car dealers without their knowledge.

Carsales chief executive Greg Roebuck said in a statement he welcomed the court’s decision.

“We saw the carsguide.com.au campaign as trying to damage the relationship of trust that Carsales has established with consumers over many years,” Roebuck said.

“We see this decision as a win for both us and the consumer, who will now not be subjected to these misleading advertisements.”

Roebuck also tried to hose down concerns the legal battle was an example of a bigger business taking on a smaller one.

“Carsguide.com.au has tried to paint itself as David in a battle with Goliath, when this is simply not the case,” he said.

“Carsguide.com.au is owned by News Corp Australia and some of the largest car dealerships in Australia. We are pleased with this outcome and expect that it will lead carsguide.com.au to take a different and more reasonable and balanced approach to its advertising campaigns in the future.”

In a statement issued to SmartCompany, Carsguide chief executive Lauren Williams said the company regretted its recent marketing campaign.

“In 2014, Carsguide introduced an approach to advertising cars that generally gives customers the choice to remain anonymous until they know who and where a dealer is,” Williams said.

“Since early 2015, Carsguide has not charged dealers on a leads model basis. Unfortunately the court found that the advertisements conveyed misleading representations. Carsguide regrets this.”

This is the first time the company has backed away from its controversial advertisements, after refusing to remove them after receiving a “cease and desist” letter from Carsales last month.

Carsales listed on the Australian Securities Exchange in 2009, raising $163.6 million in its initial public offering.