Australian media outlets have been placed on notice that they may be at risk in an Australian Competition and Consumer Commission crackdown on misleading advertising.
Addressing a consumer law congress in Melbourne on National Consumers' Day, ACCC Chairman, Mr Graeme Samuel, warned that the ACCC's priority in the year ahead was to enforce the trade practices law on a fast-track, vigilant consumer protection basis.
"In terms of misleading and deceptive conduct and unconscionable conduct, the Commission will be particularly concerned to address conduct that targets and seeks to exploit disadvantaged and vulnerable consumers", he said.
"One area of concern is our very strong view that advertising agencies and media outlets have a responsibility to ensure that they do not engage in misleading or deceptive conduct in advertising and promotions prepared and published by them.
"To this end we have launched a major campaign to bring to account those involved in the preparation and publication of advertising content including:
- advertising pre-produced by agencies
- advertising prepared by the advertiser and submitted to a media outlet for publication
- advertorials where the media outlet or a particular employee/presenter endorses or appears to endorse a product
- 'Infomercials', which in the context of television broadcasts, is in the nature of programming
- the promotion of products in the guise of current affairs reportage or lifestyle programs, in particular where the program purports to be credible investigative journalism and the product is actually being promoted, including by linkage to program's website.
"In the ACCC's view everyone involved in the preparation and broadcasting or publication of misleading or deceptive advertising is in potential breach of the Trade Practice Act 1974".
"Broadcasters and publishers will breach Section 52 of the Act relating to misleading and deceptive conduct if they publish advertisements that contain misleading or deceptive statements, unless they are able to avail themselves of the 'publisher’s defence'. This defence will not operate unless the publisher 'did not know and had no reason to suspect' that publication would amount to a contravention of the Trade Practices Act.
Mr Samuel said there would be circumstances when it would be difficult for an outlet to argue that it did not know, and had no reason to suspect, the advertising was misleading.
"These include:
- the advertising claims appear, on their face, to be extravagant, particularly if they relate to weight loss, exercise or curatives or representations to future matters
- the representations appear to be clearly contrary to generally known facts. It may also be reasonably apparent on the face of the advertisement that a claim is false, misleading and deceptive
- the publisher may have been put on notice of grounds to query the advertisement's accuracy, for instance if it is aware of Commission concerns or pending court proceedings about the goods or services in the advertisement
- the outlet may have had previous experience or complaints which indicate an advertisement may give rise to compliance problems.
"The Commission takes the view that as a media outlet's involvement in the production and scripting of advertising content increases and as advertising moves from being discrete from programming and becomes a promotion or endorsement that is integrated into programming, the media outlet's responsibility for the content of the advertising increases and it becomes less likely that the 'publisher’s defence' will apply.
"The community depends on the advertising industry, including media outlets, to provide it with crucial information to inform buying decisions. It has every right to expect that the industry take all reasonable efforts to maintain a high level of compliance with the Act.
"In the Commission's view, this requires the maintenance of proper systems and procedures designed to prevent the publication of false, misleading or deceptive advertisements".
"To reinforce the ACCC's concern, I am writing to all newspaper publishers and broadcasting licensees to advise them of their obligations and to alert them to ACCC's close scrutiny of these issues".
ACCC staff would have regard to the possible liability of relevant media outlets when investigating advertising that may breach the Act, he said.