"Never let the truth get in the way of a good story" – or selling a product
Companies and businesses need to be wary of incurring the wrath of the Australian Competition and Consumer Commission (ACCC) if they advertise and market their products with claims that are potentially misleading to consumers.
The ACCC is a Commonwealth statutory body whose role is to, amongst other things, enforce the Competition and Consumer Act 2010 (Cth) (CCA) and in particular, the Australian Consumer Law (ACL).1
The ACCC will bring proceedings against companies and businesses where it believes that statements, claims or other representations made by them about their products mislead or deceive consumers or have the potential to do so.
Australian companies and businesses have an obligation under the ACL to ensure that claims about their products do not mislead consumers. 2
The food and health sectors have become the subject of particular scrutiny from the ACCC in recent months, with several proceedings currently underway:
It is important to note that these matters have not yet been determined by the courts and whether these companies have contravened the ACL is yet to be seen.
These court actions serve as a warning to businesses operating in those sectors, and others, to carefully consider the claims and statements they make in, on, or in relation to, their products and services. Failing to do so could mean a costly fight with the ACCC, regardless of the outcome.3
1. The Australian Consumer Law is part of the Competition and Consumer Act 2010, at Schedule 2
2. Can also apply to claims and statements made in relation to services. See section 18 of the ACL - misleading and deceptive conduct, section 29 of the ACL - false and misleading representations.
3. For more information visit www.accc.gov.au