Lecture Fundamentals of business law (4th): Chapter 24 - Margaret L. Barron, Richard J.A. Fletcher

Chapter 24 - Advertising law. At the end of this chapter you should understand: the nature and impact of advertising on the market place, the significance of advertising on consumer demand, the role of the Australian Association of National Advertisers, the contents of the Advertiser Code of Ethics,…

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Advertising law

Chapter 24

Advantages of

advertising

Provides information to consumers to

allow efficient choices

Product packaging and

labelling

• Common Law protection

• Statutory protection

Trade Practices Act 1974 (Cwlth)

- Misleading and deceptive conduct

- Unfair trade practices

- Product safety and information standards Trade Measurement legislation

- National Measurements Act 1960 (Cwlth)

Disadvantages of advertising

Without regulations:

• Can provide false information

• May discourage smaller competitors

entering the market

• Can offend public

• May invade privacy

• Can be defamatory

• Can infringe on intellectual property

Self Regulation of Advertising by Industry

Advertising Standards Bureau Ltd:

• AANA Advertiser Code of Ethics

• Advertising Standards Board

• Advertising Claims Board

Advertising Federation of Australia Code of Practice

AANA Advertiser Code of Ethics

Voluntary code to ensure that all

advertisements are legal, decent,

honest and truthful, and that they have been prepared with a sense of

obligation to the consumer and society, and a fair sense of responsibility to

competitors

The Advertising Standards

Board

• Maintains standards of taste and

decency in advertising

The Advertising Claims

Board

Alternative dispute resolution for:

– Truth and accuracy of advertising

– Breaches of AANA Advertising Code of Ethics

Advertising Federation of Australia Code of Practice

• Statement of ethics

• Code of practice (for member

agencies’ relationship)

Other voluntary codes regulating

advertising

Advertising Direct Marketing Association (ADMA)

Rights for consumers

• A seven day cooling-off period

• An independent code authority with consumer

representatives

• Adoption of national privacy principles established

by the federal Privacy Commissioner

• Imposition of limits on telemarketing

• Compulsory use of a system which allows

consumers to register their decision not to receive direct marketing offers from ADMA members

Direct marketing

• ADMA Code of Practice

• Australian Press Council

• Australian Broadcasting Authority

• Federation of Australian Radio

Broadcasters (FARB)

• Federation of Australian Commercial

Television Stations (FACTS)

Statutory regulation of advertising:

-Trade Practices Act 1974 (Cwlth)

Australian Competition and Consumer Commission

Responsibilities:

• Undertakes price surveillance

• Holds inquiries into the supply of

specified goods and services

• Monitors the prices, costs and profits

of any industry or business, as

directed by the relevant minister.

“Major Australian Marketing

Law” legislation

• Trade Practices Act

– Federal legislation that regulates company conduct

• Sale of Goods Act ACT

– State legislation that regulates

contracts

“Major Australian Marketing

Law” legislation (continued)

• Fair Trading Act

– State legislation that regulates the

conduct of individuals (very similar

provisions to that of the Trade Practices

Act for companies).

• N.B Multinationals must be aware of the different legislation operating in each

country in which they do business!

“Competition” laws

Prevent anti-competitive practices

e.g.

• Collusion

• Takeovers/mergers that create

monopoly situations (e.g NM/ANZ)

• Collective boycotts

Trade Practices Act 1974 (Cwlth)

• S52: Prohibition on misleading and deceptive

conduct.

• S53: Prohibition on making false

representations in connection with the supply or promotion of goods and services.

• S55 & 55A: Prohibition on conduct that is liable

to mislead the public as to the nature,

characteristics and suitability for purpose, or the quality of any goods or services, or the

manufacturing process of any goods or services.

Tort of deceit

• The representation made in the

advertisement is one of fact and not

an opinion, prediction or promise.

• The representation is false

• The representation induces the

plaintiff to enter into a contract.

• The advertiser made the

representation knowing it to be untrue,

or was reckless as to its truth

Tort of injurious falsehood

• Slander of goods

– A false statement is made about the

plaintiff.

– The statement is disparaging of the

plaintiff’s goods or services, or method of carrying on a business, or title to

property.

– The statement is made maliciously.

– The plaintiff suffers, or is reasonably

Passing off

• The tort of “passing off” has been

committed where one trader causes customers and potential customers to incorrectly associate their products or business with those of another trader,

or person