The consumer plays a powerful role in the supply and demand of a company products, marketers need to ensure they’re not enlisting in misleading and deceptive conduct when advertising a desired product/service whether this is intentionally or unintentionally will still impose huge financial loses, and even imprisonment. The relationship between consumers and advertisers is mutual with both replying on each other for satisfaction of something else in the context of this legal explainer the consumer; relies on the advertiser to recommend a product that would suit their needs while the advertiser; must advertise in such a way that the consumer will want have the mentioned product. Sometimes in order to fulfil deadlines or plain ignorance to laws can assist in losing track of the ethical and legally binding guidelines put in place. The explainer will discuss the consequences of deceptive or misleading advertising using the ‘Dan Active’ lawsuit a health company sued for lying to consumers about the properties of their yogurt.
What even is advertising ?
Now before looking into what is ‘misleading or deceptive advertising’ we must first ask ‘What is advertising in its purest form?
Lawpath describes Advertising can best be explained as the process a company utilizes to draw attention to their products.
What is deceptive and misleading advertising ?
So, what is deceptive or misleading advertising ? although there is no defined definition for what constitutes as ‘misleading’, its best explained as something that is different to what was originally described. Many people get confused between the terms fake news and deceptive and misleading advertising. While misleading advertising looks at companies or marketers who have purposely or unintentionally promoted a faulty product (doesn’t have to be physically broken when brought to be labelled faulty) to a consumer, Fake news is disinformation published on websites and social media for political purposes (Pearson & Polden 2018).
A product can be considered misleading if the following false claims are made:
- Quality, style and history of product
- The need for the goods/service
- Price
- Use of product
The Australian Competition & Consumer Commission (ACCC) reported more than 4 common types of misleading advertising:
- Fine print and qualifications
Common practice to include extra information in fine print however the text must not go against the overall message
- Comparative advertising
Comparing a product/ service to another can create a false impression
- Bait advertising
Bait advertising takes place when an advertisement promotes certain (usually ‘sale’) prices on products that are not available or available only in very limited quantities.
- Environmental claims
Environmental claims found on small household items like cleaning products, toilet paper up to white goods. Includes statements about environmental sustainability, energy use, water efficiency and impact on animal welfare.
Tv, radio or internet ads aren’t the only areas where misleading or deceptive advertising can occur, recently Instagram has been a favourably online platform to promote products through the use of social users this is referred to as influencer marketing where a company will give free products to a well-known social influencer to endorse the brand .If you check out your favourite youtubers, bloggers, or even celebrities Instagram page your most likely to find some sort of collaboration with a brand or company product.
examples of influencer marketing
Case study: Activia
In 2010, a recently popular health brand Dannon has overgone a lawsuit with sub brand Activia when an LA woman who suffers from stomach problems filed the class-action litigation after discovering that their ‘scientifically proven’ Activia yogurt which helps to regulate the digestive system was misleading to consumers.
Since it was first introduced in 2006 Activia and supporting products such as DanActive has claimed to have contained probiotic bacteria which not only helps to regulate the digestive system but also improve your immune system.
The company which produced an ad campaign with spokesperson Jamie Lee Curtis describing the yogurt as ‘delicious’ used the claims of the probiotic bacteria to sell their yogurt at a 30% increase compared to similar yogurt products.
Cleveland Judge said that they didn’t prove anything or have evidence to support their health claims.
A settlement was ordered of $45 million to be paid to mislead US consumers and under the settlement, product labels and any advertisements of Activia yogurt in reference to claims the product helps to regulate the digestive system were to be removed or reworded.
What laws, government bodies or NGO’s do marketers need to be aware of?
Fighting a court case, no matter how big or small will result in financial loses this ranges from paying lawyer fees, to disgruntled consumers. Because there is no defined meaning for misleading, when practiced in court the products ‘general or overall impression’ is applied.
If the product misleading claims risk the interest of the public the court can grant a restraining order or injunction restricting the advertising from continuing to use the affected product. When making false claims about a product that has potential to cause injury or health problems, advertiser can be guilty of misdemeanour and can be charged up to $5000 and potential for 6 months imprisonment.
The Australian Consumer Law (ACL) is the main body of government for advertisers it works to protect consumers and cover issues of business conduct, unfair trading practices and regulate business to consumer transactions. The ACL is national law, working alongside the ACCC who work closely with state and territories consumer protection agencies.
Under section 18 of the consumer law prohibits a person, in trade or commerce to engage in misleading or deceptive conduct
The Australian Competition and Consumer Commission (ACCC) deals with misleading and deceptive conduct under section 18 of Competitor and Consumer Act 2010 in Consumer law. ACCC has the power to substantiate a company’s claims in relation to their social media pages.
Much like the ACCC the Australian communications and media authority (ACMA) is a federal body responsible for regulating broadcasting, radio, telecommunications and online content. The powers of ACMA are set out in the Broadcasting services Act 1992.
Not all agencies are legally binding, this is the case for the Australian Association of National Advertisers (AANA) a national body helping to promote responsible and respected marketing through their established a set of advertising principles.
You can check them out here: https://aana.com.au/self-regulation/
Some advertising and promotion efforts made by businesses appear in the ‘Spam Act 2003’ which sets out the guidelines and rules that marketing practitioners should be aware of when sending out promotion messages.
The role social media and the law plays?
The emergence of the Web in Europe in 1985 by Tim Berners-Lee has led for social media to flourish under the advancements of technology with this, the laws that bounded us offline need to be changed drastically to suit new online perimeters.
We are all publishers in the eyes of law when we post something to the online world. Identical rules apply to real world journalist and publishers who are subject to the same laws.
In a virtually expanding world, understanding the law is crucial for media practitioners for 3 key reasons:
- 1. Public Responsibility
Although Americas ‘Freedom of Speech’ is protected in the constitution, they can still prosecute your ‘right’ to write over the rights of the individual especially when concerning
Australia still is considered freer than many other countries, a sound knowledge of regulations and laws that apply to your jurisdictions will eradicate the likelihood of us media practitioners abusing that power holding your accountability when it comes into question (Pearson & Polden, 2018).
2. Self-protection
When publishing an article or promoting a product or service, remembering your ethical guidelines can stop you or the company you work for from receiving legal transgressions as defamation can be quite costly, and not to mention it has the potential to ruin your career or even send you to jail.
3. Professionalism
With the advancements in technology , people are adapting to a more digital world where your online persona can be different from your personality. It’s important to learn how to set yourself apart by demonstrating a high level of integrity and knowledge of media laws.
Conclusion
In conclusion, although there is no defined definition for ;misleading’. It is clear that engaging in deceptive or misleading conduct when advertising can led to large financial sums being paid or worse imprisonment, with the emergence of new online social media platforms and recent changes to media law reform marketers whether advertising on or offline need to be consciously aware of the laws surrounding their area of endorsement in order to comply with current government and non-government bodies.
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