Network Ten settles on misleading land 'advertorials'

The Australian Competition and Consumer Commission has accepted a negotiated settlement from television channel Network Ten about misleading land 'advertorials' broadcast on Good Morning Australia in 1993.

In August 1993 a Maryvale resident complained to Network Ten about representations made about the land by Gold Coast Property Sales (GCPS) on a promotion on Good Morning Australia, saying they were incorrect. The major representations concerned:

• the land's investment potential;
• its proximity to Brisbane, the Gold Coast, and other areas*; and
• the availability of utility services (electricity, telephone, water, roads etc).

Despite complaints to Network Ten, the 'advertorials' continued. The ACCC then received a complaint and, after conducting an investigation, decided the representations contravened sections 52 and 53A of the Trade Practices Act, which deal with misleading or deceptive conduct and false representations. In December 1993 the ACCC began legal proceedings against GCPS and Television & Telecasters Ltd (Network Ten). A settlement was reached with GCPS in June 1995.

In August 1996 the ACCC commenced a representative action against Network Ten Ltd on behalf of two consumers who alleged they had suffered loss due to the representations made.

After negotiations, a settlement was reached. It includes consent orders providing compensation for the consumers whom the ACCC represented. Network Ten has also provided the ACCC with legally enforceable undertakings that the Network will maintain the compliance program with respect to advertorials which commenced in May 1994, which includes the following components:

exercise editorial control over the contents of all advertorials before broadcast; institute a revised complaints handling system including an external audit facility; and provide the ACCC with a copy of reports prepared by the external auditors.

"It is important that television stations realise that they have responsibilities to their viewers," ACCC Chairman, Professor Allan Fels, said today. "The Maryvale resident who approached to Network Ten had legitimate complaints about the promotion, but could not get a satisfactory response.

"Television stations are increasingly accepting, and taking part, in 'advertorials'. Stations must carefully scrutinise 'advertorials' and make appropriate alterations to ensure that, to the best of the station's knowledge, the 'advertorials' do not breach the Act.

"The same rules apply to them as to any other business," he said. *The land is 128 km south-west of Brisbane.

Further information Professor Allan Fels, Chairman, (03) 9290 1812 or pager (016) 373 536 Ms Lin Enright, Director, Public Relations (06) 264 2808 (w).