30/08/2024
Whether you are advertising your business in a TV ad, on a billboard or bus stop, through online or sponsored influencer posts, you need to be aware of the range of regulations and rules that apply to your advertisements. The Australian Consumer Law (ACL) in the Competition and Consumer Act 2010 (Cth) applies to all Australian businesses and aims to protect consumers and ensure fair trading in Australia.
If a consumer believes a business is not compliant with the ACL and for example, has engaged in misleading conduct, then they have a right to report that business to the Australian Competition and Consumer Commission (ACCC) where the claim could be investigated and the business fined.
This article unpacks the key things you need to know about how the ACL applies to advertising and marketing your business and how to make sure you comply with it.
Misleading or Deceptive Conduct
The ACL prohibits false, misleading or deceptive conduct in any communication with consumers, whether in advertising, through social media or product labelling. Misleading or deceptive conduct can include:
- leading someone to a wrong conclusion about the nature of the product or service you provide;
- creating a false impression about your business;
- omitting or remaining silent on important information;
- making false claims about your products or services.
Your business must not make false claims about the quality, value, price or benefits of goods or services. If you make claims about what your product could do or what your service might achieve, you must be sure you can substantiate that claim. It is not just a matter of compliance with the ACL, but false advertising can cause reputational damage to your business.
- Fake or misleading online reviews
As more consumers rely on online reviews before they decide to engage a business, businesses can feel pressure to manipulate or create false positive reviews to create a more favorable impression of their business to consumers. Creating fake reviews or editing or removing genuine negative reviews is considered misleading and deceptive conduct. Whilst it is important to manage your business’s online reputation, you need to ensure that in doing so you are not misleading consumers.
- Social media influencers and promoted posts
The influencer industry is on the rise and can be a popular and cost effective way to market your business products or services to your target demographic. When businesses engage an influencer to showcase their products or services they have a responsibility to ensure that the influencer will be doing so in a way that does not mislead consumers. You should also be careful when providing influencers with scripts that you never require or suggest influencers to misrepresent their own experience or views on a product or service.
- Environmental claims
Any environmental claims you make about your products must be able to be substantiated. Some common claims about products being environmentally friendly include: “100% recyclable” or “eco-friendly” or “sustainable”. If you use claims like this about your product, you need to ensure there is a reasonable basis for your claims. Make it clear to consumers on what basis you are making this claim. Greenwashing is on the ACCC list of enforcement priorities and is unlikely to go unnoticed.
- Comparative advertising
Businesses may use comparative advertising to promote the superiority of their products in comparison to a competitor. It is a way to directly challenge your competitors and influence consumers as to why they should buy your product over another. Before using comparative advertising, you should consider the following:
- Is the comparison accurate?
- Are the products or services being compared reasonably similar?
- Will the comparison be valid for the life of the promotion?
If you are comparing your product to another competitor’s product, and the features are not relatively similar, you could be considered to be engaging in misleading and deceptive conduct. Further to this, you need to consider the duration of the advertisement planned and the likely reaction of the competitor. For example, if a competitor becomes aware of your comparative advertising and moves quickly to change their product or service, this could mean your campaign becomes misleading.
- Misleading AdWords through search engines
There are a range of ways a business could be found to mislead consumers through search engines or paid “ad words” pop-up ads and other types of advertisements. All businesses must be aware that the ACL applies to these kinds of advertisements as well. Businesses have been caught out for using “keywords” of their competitors and creating the illusion that when a consumer clicks on their link, they are actually clicking on the link of their competitor. This has been found to be misleading and deceptive conduct and businesses need to be careful when using AdWords and search engine marketing.
Key Takeaways
As a business advertising your product or service, whether online, in social media, outdoor advertising or traditional television or radio, the ACL applies to you, and you need to be aware of your responsibilities to not mislead or deceive consumers.
With so many different ways you can market your products or services, you need to ask yourself whether the ad is accurate and any claims you make about your product or service can be substantiated.
Griffin Legal has an experienced advertising regulatory team who can give you the advice you need so that you are confident your advertising is compliant.
For assistance contact our team at enquiries@griffinlegal.com.au