What is an advertising sign-off?

In part because the introduction of the Australian Consumer Law gave the Australian Competition and Consumer Commission (ACCC) new tools to investigate and sanction businesses for their advertising practices, businesses are increasingly obtaining legal vetting of their advertising and marketing materials to ensure that they comply with applicable laws.

The scope of any advertising sign-off will of course depend on the nature of the advertisement itself, where it will be published, and the nature of the specific goods or services.   Some common areas of concern are:

Australian Consumer Law

The Australian Consumer Law as provided in Schedule 2 of the Competition and Consumer Act 2010 (Cth) imposes a number of obligations on advertising and promotional material.  Some of the most relevant are:

  • the prohibition of misleading and deceptive conduct [section 18];
  • the prohibition of bait advertising (i.e. “bait and switch”) [section 35]; and
  • a requirement in some cases to prominently specify the “single price” of the goods or services [section 48].

The ACCC has issued infringement notices to a large number of companies, many of which are large companies and household names (including Telstra, Optus, TPG, Foxtel, Super A-Mart, and Nissan).  In more serious cases, the ACCC has brought court proceedings for advertising campaigns which contravened the Australian Consumer Law, some of which have resulted in penalties of many millions of dollars being imposed.  One such advertisement is reproduced below:TPG Advertisement

This advertisement is a perfect archetype of “headline pricing”, in that it promotes “Unlimited ADSL2+” for $29.99 per month in huge text, while the fact that it is only available at that price “[w]hen bundled with TPG home phone line rental” at an additional cost of $30 per month is buried in the fine print. On the whole, this advertisement is misleading and deceptive, and contravenes the requirement to prominently specify the “single price” of goods or services – a requirement which was introduced specifically to target advertising such as this. In this case, the Federal Court imposed a penalty of $2million on TPG Internet for a series of advertisements which included the example above.[1]

The ACCC also has the power to issue “substantiation notices”, which require the recipient to give information or documents to the ACCC which substantiate any claims made in advertising. This emphasises the importance of fact-checking and analysing advertising material to ensure that any claims or representations made are defensible.

Competitions and games of chance

Business promotions or competitions which involve an element of chance (e.g. “go in the draw to win…”) are subject to specific regulation as “trade promotion lotteries” (or similar terms) and are subject to different laws in each State and Territory of Australia.[2]  In many cases, you must obtain a government permit to conduct such a promotion, and the permit number must be contained in any relevant advertising material.
If your promotion would be caught by these regulations, we can advise you on structuring the promotion, draft terms and conditions for the promotion, and assist you with applying for the relevant permits.

Intellectual property

Advertising will contain material protected by intellectual property laws.  It is important to ensure that if, for example, you are using photographs or other images obtained from third parties that they are appropriately licensed for use in your advertising campaign, and that if you are using the trade marks of third parties (e.g. for the purpose of comparative advertising) that you are doing so appropriately.

Industry-specific or product-specific regulation

Some industries or particular products are subject to specific regulation of advertising.  The very nature of the goods or services needs to be considered in the context of their regulatory regime.  The regulatory regime which applies to the Financial Services industry is very different to the Dental Profession.  Considering the nature of the goods or services is a critical starting point when considering an advertising sign off prior to launching an advertising campaign as each product or service will differ.

Media specific regulation

Advertisements can also be subject to particular rules which apply to the media in which they are delivered.  In the case of email or SMS marketing, the Spam Act 2003 (Cth) imposes a number of obligations on the content of such adverts and the manner in which they are carried out.  Television advertising may be subject to content-based restrictions, especially in certain time slots.  In some cases, publishers or broadcasters may require that industry self-regulatory rules (such as those established by the Advertising Standards Board) are complied with, even if those rules do not have force of law.

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[1] ACCC v TPG Internet [2012] FCA 629.

[2] Charitable and Non Profit Gaming Act 1999 (Qld), Lotteries and Art Unions Act 1901 (NSW), Gambling Regulation Act 2003 (Vic), Gaming Control Act 1993 (Tas), Lottery and Gaming Act 1936 (SA), Gaming and Wagering Commission Act 1987 (WA), Lotteries Act 1964 (ACT).

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

Further information

If you would like us to advise you on whether a proposed advertising campaign complies with Australian law, please call us for a confidential and obligation free conversation.

Malcolm Burrows Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
Telephone: (07) 3221 0013 | 1300 DUN LAW
Mobile: 0419 726 535
e: mburrows@dundaslawyers.com.au

Dundas Lawyers
Street Address Suite 12, Level 9, 320 Adelaide Street Brisbane QLD 4001

Tel: 07 3221 0013

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