MISLEADING AND DECEPTIVE CONDUCT IN CONSUMER ADVERTISING

Advertising is a competitive space for businesses to claim their share of the market.  While creative advertising can make a business, it can also break it if found to be misleading or deceptive to the consumer. Over recent years, the Australian Competition and Consumer Commission (ACCC) has conducted stringent investigations on a number of high profile Australian companies for misleading and deceptive conduct including TPG, Heinz, Optus, Harvey Norman and Woolworths.

The Australian consumer law governs misleading and deceptive conduct and operates to protect consumers from conduct of this kind in advertising. The following are a few key factors businesses should follow to prevent an infringement action from the ACCC before commencing a marketing campaign.

Know your audience

The age, demographic and lifestyle of your audience comes into play when deciding the appropriate wording, branding, imagery and statements used to market a good or service for your business. This is part of the process of understanding how your consumers will perceive the key messages represented by your brand.

Overall impression of the good or service

It is important to deliberate how your audience will perceive the good or service as a whole.  This is known as the overall impression and comprises how the packaging, branding, imagery, wording and colours are used to create a certain perception of the good or service to the consumer.

In August 2018, the Federal Court of Australia ordered H.J. Heinz Company Australia Ltd (‘Heinz’) to pay $2.25 million for making a misleading health claim of their Little Kids Shredz products.  The product was marketed to be healthy for children, however, more than two-thirds of the listed ingredients in an individual product were sugar. It was argued that the Heinz nutritionists “ought to have known” that a representation of the product as healthy was false and misleading in nature to consumers.

Consumers’ perspective

The best question to ask is what the target consumer would think of when they see the good or service. If you are marketing healthy food, check the ingredients with a dietician to ensure it is reasonable to represent the food as healthy to the consumer. If you are claiming a product is made in Australia, ensure the entire manufacturing process is contained in Australia before you represent this claim to the consumer.

In June 2018, GAIA Skin Naturals (‘GAIA’) paid an infringement fine of $37,800 for false and misleading representations for marketing baby products as ‘organic’ and ‘natural’ when the products contained two synthetic chemical preservatives. The Court decided the claim was misleading as “the consumer would think these products are free from synthetic chemicals when in fact, they are not.”

If you require further information in relation to advertising and marketing in alignment with the Australian consumer law¸ please do not hesitate to contact our team of experienced solicitors on 1300 DSS LAW.

Disclaimer

DSS Law insight articles are intended to provide commentary and general information. They should not be relied upon as formal legal advice. If you would like specific advice relating to this topic, please contact DSS Law on 1300 DSS LAW or epost@dsslaw.com.au.