Tag Archives: Australian Consumer Law (Cth) s 18

Fine Print Disclaimers May Not Protect Advertising from being Misleading: Australian Competition and Consumer Commission v TPG Internet Pty Ltd

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By Dr Jeannie Marie Paterson and Veronica Wong

ACCC v TPG Internet Pty Ltd Case Page

Section 18 of the Australian Consumer Law (previously s 52 of the Trade Practices Act 1974 (Cth)) contains a broad ranging prohibition on conduct that is misleading or deceptive or likely to mislead or deceive. Misleading conduct in advertisements by traders causes harm by distorting the purchasing choices of consumers. This may reduce competition in the market by leading consumers to favour products that don’t have the features that are promoted. It may also increase costs for consumers, incurred either by entering into contracts that are not in their best interests or by incurring search costs that are wasted when they discover that the product does not exist as represented.

In Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54, the High Court confirmed importance of s 18 in protecting consumer interests by holding that so-called ‘headline’ advertising may be misleading notwithstanding the existence of a fine print disclaimer qualifying the representations in the headline statement.

The High Court also confirmed that deterrence should play a ‘primary’ role in setting the appropriate penalty to be imposed on a trader for a contravention of s 18. Specifically, the court should consider the need to deter offending conduct and any penalty imposed should be significant enough that it is not merely a cost of doing business. A majority of the High Court (French CJ, Crennan, Bell and Keane JJ; Gageler J dissenting) held that the Full Federal Court erred in setting aside the findings of primary judge and restored the pecuniary penalty of $2 million.

The decision of the High Court in TPG shows that whether an advertisement is misleading contrary to s 18 of the ACL should, as the words of the section suggest, be assessed by reference to the impressions conveyed by the advertisement in the circumstances in which it is delivered, and not merely by reference to the existence of technically correct information available to those consumers who choose to look for it or by reference to the presumed background knowledge of consumers. This approach, combined with the recognition that the penalty for contravention of s 18 is aimed at genuine deterrence of the offending behavior, is entirely consistent with the consumer protection purposes of the legislation. Continue reading →

Google Searches and Misleading Conduct: Google Inc v Australian Competition and Consumer Commission

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By Sarah Mulcahy and Jeannie Marie Paterson

Google v ACCC Case Page

In Google Inc v Australian Competition and Consumer Commission [2013] HCA 1 the High Court held that Google had not engaged in misleading or deceptive conduct contrary to s 52 Trade Practices Act 1974 (Cth) (TPA) (now s 18 of the Australian Consumer Law (ACL)) in publishing ‘sponsored links’ in response to web page searches. The Australian Competition and Consumer Commission (ACCC) argued that Google engaged in misleading and deceptive conduct because its program allowed advertisers to enter the names of competitors as keywords so that a ‘sponsored link’ to the advertiser’s company would arise when the competitor’s name was entered into the search engine. Although the ‘sponsored links’ by the advertisers were misleading or deceptive, Google was held not to be responsible for the misleading or deceptive conduct because it did not author the ‘sponsored links’, nor did it endorse the misleading representations of the advertisers.

However, the decision does not relieve those who control or administer internet sites of liability for misleading or deceptive information posted on those sites. In this case, the links were generated by a computer algorithm over which Google had limited control. But in other situations where an administrator has greater control, it is possible that the administrator may still be liable for the misleading or deceptive conduct of posters or advertisers. Continue reading →