Introduction
Advertising and promoting your business is a key part of forming a successful customer base and helping your business thrive.
Any material used to promote a business, or any product or service, must comply with applicable legal requirements, such as the Australian Consumer Law, Australian and state or territory-based advertising laws, industry codes of conduct and codes and guidelines of self-regulatory bodies.
For example, under the Australian Consumer Law, it is illegal to make false or misleading claims (or any claim that is likely to be misleading) or use patently false or deceptive figures in advertising and promotional activities. This applies to radio and television advertisements, newspaper and magazine advertisements, internet advertisements, ads on social media and marketing emails.
How Employsure got it wrong
Earlier this month, an Australian HR business found out the hard way that the Australian Consumer Law also extends to Google Ads. The background to this case was, between August 2016 and August 2018, when consumers searched for ‘fair work ombudsman’, ‘fair work commission’ and other associated terms, Employsure’s ads appeared in Google search results containing headlines including “Fair Work Ombudsman Help – Free 24/7 Employer Advice” and “Fair Work Commission Advice – Free Employer Advice”.
In November 2021, Employsure was fined $1 million. However, the ACCC appealed this decision. Earlier this month, the Federal Court found that the original fine was ‘manifestly inadequate’ and increased the penalty to $3 million. On the conduct, the Court said:
“[Employsure] represented to business owners that Employsure is, is affiliated with, or is endorsed by a government agency when, in fact, Employsure is a private company that has no affiliation with, and is not endorsed by, any government agency.”
Moving forward
Be mindful of what you put in your ads. Businesses must always consider the implications of advertising for their customers and potential customers before promoting a product or service. Misleading or deceptive conduct, false and misleading advertisements and unconscionable conduct can all result in an infringement notice from the ACCC and lead to further, more severe court action.
In addition to the Australian Consumer Law and the Competition and Consumer Act 2010, businesses must also be mindful of any other relevant codes of conduct or self-regulatory industry codes, such as the Australian Association of National Advertisers Code of Ethics and Advertising Safeguards or the Advertising Standards Board of Australia Code of Ethics.
It is also important to check the following:
- Codes and guidelines of any industry self-regulatory authority before running any advertisement or marketing campaign. Failure to comply with these codes and regulations can lead to significant civil and criminal penalties; and
- Relevant state and territory laws include any restrictions on advertising in certain public areas and restrictions on the selling/promotion of certain products or services in certain areas.
Key Takeouts
Advertising and marketing activity must always be directed to achieve lawful outcomes through legal means. Advertising and promotional activity that does not comply with the law will expose the business (and possibly managers and directors) to significant financial penalties and consequences.
If you’d like assistance understanding your legal obligations when advertising and promoting your business and goods/services, please contact our business lawyers.