Telstra spars with AOC over Olympic advertising

The Olympic Committee is seeking injunctive relief against Telstra, which it said has breached the law by advertising about the Rio games despite not being an official sponsor.

The Australian Olympic Committee (AOC) has argued that Telstra has contravened both the Olympic Insignia Protection Act (OIPA) and Australian Consumer Law (ACL) through its "I go to Rio" marketing campaign, as it does not have an AOC licence to advertise about the Olympic Games.

During fast-tracked proceedings in the Federal Court of Australia, the AOC said both the development of Telstra's advertising campaign and the campaign itself breached the legislation in an effort to gain customers by using a "back door" for commercial gain without paying for association with the AOC.

"It's a very extensive, no doubt extremely well thought out, very extensive advertising campaign, which a significant part extent of it is ... trading off what's about to happen in a few weeks' time, bearing in mind what the Olympics are about, how they resonate with the Australian population and millions of people in the world, and the fact that Telstra was a sponsor I think from 1990 until 2012," the AOC argued.

"[Telstra is] no longer a sponsor with the AOC, because it's been replaced by Optus."

The AOC put forward the argument that Telstra capitalised off its partnership with official Australian Olympics broadcaster Seven Network as a launch pad for its own rebranding into a technology firm, announced over the weekend.

"This campaign is part of Telstra if not restructuring itself, then certainly rebranding itself going forward," counsel representing the AOC claimed.

"Telstra is clearly using this opportunity and its previous agreement and its current agreement with Seven to transform itself into a world-class technology company."

During the development stage, the AOC said the marketing campaign was referred to in an internal Telstra email as "the Olympics campaign", with the email allegedly saying that the telco would use it as a "springboard" for its rebranding.

Telstra, however, disputed the admissibility of the internal email, saying it has not been traced back to a specific staffer.

The marketing campaign itself was designed to attract customers through association with the Rio games, the AOC contended, with counsel proceeding to go through all of the products and services associated with "Rio" specifically.

While Telstra was careful not to use the word "Olympics" in most of its advertising, instead referring simply to "Rio", it is "demonstrably clear" that it associated itself with the Olympics, the AOC said; "we're all off to Rio again", AOC counsel quipped when reading through the details of yet another ad.

"It's not in dispute that the materials promote Telstra's goods and services, but what they have denied or put in issue is that its use was for a commercial purpose pursuant to [OIPA] Section 30, and we say plainly it was," he said.

For its own part, Telstra argued that it is Seven's right to broadcast the Olympics on the "ever-expanding range of technologies" available to it, including on its devices and services. It pointed out that Telstra and Seven have been marketing Seven's broadcasting across Seven's app with the knowledge and approval of the International Olympic Committee (IOC).

As such, none of Telstra's marketing uses "Olympics" as a stand-alone phrase, always referring to it as "Olympics on Seven", meaning its activities have represented "nothing but the truth", Telstra said.

"Telstra is sponsoring Seven's coverage, Telstra is sponsoring Seven's 'Olympics on Seven' app, Telstra has arrangements with Seven to be designated as the official technology partner of Seven's coverage, and there's nothing that's in there that's untrue," counsel representing Telstra said.

After initially being contacted by the AOC, Telstra's ads have also carried explicit disclaimers that it is Seven's coverage, not Telstra's.

In regards to Telstra arguing the IOC has authorised it to advertise around the Olympic Games, the AOC said that while Seven is both an IOC broadcaster and an AOC sponsor, Telstra is not. As there is no direct relationship between the IOC and Telstra, the approval for using the Olympics name and insignia was for Seven, not for Telstra, the AOC said.

Telstra, however, said that the IOC has more authorisation for distributing rights for broadcast and marketing than the AOC.

In a brief appearance, counsel representing Seven asked to be made privy to any confidentiality agreements and orders, and sought several of its own confidentiality orders on various contracts and internal documents being used in the court case.

Overall, Telstra denied that its use was in a commercial purpose pursuant to OIPA s30, while the AOC said it was plainly used for that and is a clear breach of the Act. As such, it is seeking injunctive relief.

Justice Wigney noted that the central question to the case is whether Telstra is "exploiting" its association with Channel Seven in order to gain more customers from marketing towards the Rio games.

"The critical question, at least under OIPA, is whether to a reasonable person, the use of the expression 'Olympics' as described would suggest that Telstra was a sponsor of or was a provider for the AOC or IOC for the Olympic games," Wigney J said.

"Section 30(2)(b) seems to be the critical issue," he concluded; s30(2)(b) states that an entity has used a protected Olympic expression for commercial purposes if "the application is for advertising or promotional purposes, or is likely to enhance the demand for the goods and services".

Given the nearness of the Olympic Games, which start next month, the AOC's legal action was fast-tracked on Monday, with a case brought against the telco for what the AOC called a "clear attempt to deceive Australians".

"To be clear, Telstra is not a sponsor of Australia's Olympic Team and has no official role with the Olympic Movement," the AOC said on Monday.

Telstra has countered that it did update its advertising to explicitly state that it is not an official Olympic sponsor. It added that the Olympic-based advertising is simply to promote its channel Seven partnership, which will broadcast the Olympic Games.

"Telstra has an existing commercial partnership with the Seven Network. Our current advertising simply promotes that commercial arrangement and that Telstra customers get free access to premium content through the Seven app," the company said in a statement.

Justice Wigney will hand down his judgment next week.