29/06/2015

The ACCC is sitting in the consumer's corner and they're watching big businesses and their 'red hot deals'.

Everyone is always looking to bag a bargain, no matter what it is they are trying to buy. But how can you tell when a bargain isn’t such a sweet deal after all?

In the last few years alone the ACCC has held some of Australia’s ‘big guns’ accountable for deceiving consumers under the false premise of a “great deal” which in fact was nothing more than colourful advertising. It seems that the ACCC is focussing on the everyday commodities used by ordinary Aussies, sold by big businesses who cloud the sales offer with confusion in order to increase their profit margin.

In 2013 the ACCC held TPG liable for their ‘dominant message’ not being a full picture of their proposed deal. In 2014 Telstra successfully held Optus to this same dominant message argument when comparing coverage of the two networks. In 2015 the rule hasn’t changed – the dominant message of an advertisement will be used to determine if the advertisement is misleading or deceptive. Having the ‘catch’ in the fine print will not protect you from being caught by Australian Consumer Law.

In 2015 the Compliance and Enforcement Policy released by the ACCC pushed the focus for this year as being ‘truth in advertising’ and ‘consumer issues in the health and medical sectors’.

The law is clear, businesses engaging in misleading or deceptive conduct, or conduct that is likely to mislead or deceive, will be found to be in breach of section 18 of the Competition and Consumer Act (2010) and face penalty for doing so.  A breach may still be found where a person or company did not intend to mislead or deceive anyone, or even where there has been no loss or damage as a result of the conduct.

In March of this year the ACCC commenced proceedings in the Federal Court of Australia against Reckitt Benckiser (Australia) Pty Ltd, alleging that they misled the general public in their advertising of their ‘Nurofen Specific Pain Products’ range. Reckitt Benckiser represented that each of the specific pain products was designed and formulated for a particular type of pain, that it would treat that particular type of pain more effectively than the other general pain products and, finally, that to be most effective it should be solely used for that type of pain.

The ACCC alleges that this is misleading and deceptive because the products are actually identical, containing the same active ingredient. In addition, the Australian Register of Therapeutic Goods lists each product as being suitable to treat a variety of pain types. The retail price to consumers for the specific product range is significantly higher than other products that arguably could be used to treat the same pain type. The case is continuing so watch this space!

One thing is clear, the ACCC is demanding that advertising be clear in its message to consumers. Witty and catchy taglines that hide or obfuscate may not be acceptable.

For further information, please contact Townsends Business & Corporate Lawyers on (02) 8296 6222.