AUSTRALIA Gabrielle Kopke (National Brand Manager) Peter Le Guay Partner +612 8248 3424
+612 8248 5899 pleguay@thomsonslawyers.com.au www.thomsonslawyers.com.au
Staying ahead of the game in Australia In today's world the laws affecting advertising are increasingly complex and rapidly changing. From the Australian point of view, Peter Le Guay, Partner at Thomsons Lawyers discusses some things to be aware of to stay ahead of the game. The most significant recent change in Australia which affects advertising has been the introduction of the new Australian Consumer Law (ACL) which came into effect in January 2011. The ACL replaces the consumer protection provisions of the old Trade Practices Act 1974 (TPA) which has been repealed and replaced by the new Competition and Consumer Act 2010 (CCA). The ACL is found in Schedule 2 of the CCA and largely repeats many of the consumer protection provisions of the TPA such as section 52 (misleading or deceptive conduct) which is now section 18 of the ACL and section 53 (false representations) which is now section 29. However, there are additional provisions in the ACL which were not previously in the TPA of which businesses need to be aware. These include the specific prohibition of false or misleading representations concerning testimonials in respect of particular goods or services. These testimonials must be correct to avoid a breach of section 29 of the ACL. Additionally there are provisions for a range of new powers and penalties (that have been in operation since April 2010) which have provided the competition and consumer regulator, the Australian Competition and Consumer Commission (ACCC), additional powers to investigate and/or penalise individuals or companies that engage in certain prohibited conduct. For example, the ACCC can now ( and quite regularly does) issue individuals or companies with Infringement Notices who are alleged to have breached the ACL by engaging in such conduct as unconscionable conduct, unfair practices (other than misleading or deceptive conduct), pyramid
selling, non-compliance with certain product and safety information requirements and failing to respond to a Substantiation Notice or providing misleading information in response to Substantiation Notice. An Infringement Notice must be issued within 12 months of the alleged breach and the penalty payable can vary depending on the breach. However for the most part the penalty is AU$1,320 for individuals and AU$6,600 for corporations. Substantiation Notices on the other hand are essentially an investigative tool that the ACCC can employ to determine whether the advertiser possesses substantiating documentation that could support the claims made. For example, a Substantiation Notice can be used to investigate the ACCC’s concerns about was/now pricing claims, business opportunity claims, country of origin claims, composition of goods claims, health claims, environmental claims and product safety claims. It is not clear how heavily the ACCC has relied on Substantiation Notices to date (as there is no public register of them as there is for Infringement Notices) however if issued with one, the recipient has 21 days in which to respond. Failure to respond could result in an Infringement Notice or Public Warning Notice being issued, or the ACCC applying to the Court for the payment of a pecuniary penalty. The ACCC can also now issue Public Warning Notices, or “name and shame” notices as they have been called, to alert the public to a suspected breach of certain provisions of the ACL. A major consideration in the ACCC’s reckoning as to whether they should issue a Public Warning Notice is whether there an imminent need to inform consumers so they can avoid suffering detriment. To date the ACCC has issued one Public Warning Notice concerning misleading representations about potential earnings from a business opportunity.
marks. All businesses use trade marks, whether registered or not, to identify their goods and/or services, including by way of advertising. While a trade mark can function and be protected as such even if it is not registered, undoubtedly the best protection for it is obtained by registration. If the trade mark is not registered, the trade mark owner will need to establish significant use of, and reputation in, its trade mark in the marketplace in order to protect its trade mark rights at common law. This is an expensive and time consuming exercise which may be avoided if the trade mark is registered. A quick word on privacy. In the ever increasing online world, consumers are becoming more and more aware of the rights under the Privacy Act 1988 and the Spam Act 2003, and advertisers and their agencies need to be aware of the limitations that this legislation can place on their online activities. Privacy in particular has recently been the subject of a comprehensive review by the Australian Law Reform Commission (ALRC) which delivered 297 recommendations for change. When advertising goods and services, it is crucial that businesses are aware of their rights and obligations under local laws. Whilst the CCA, Privacy and Spam Acts impose certain limitations on businesses in respect of their advertising activities, businesses can stay ahead of the game by being aware of these limitations and putting systems in place to comply with them.
Aside from issues under the CCA, advertising raises issues surrounding intellectual property, in particular, trade
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