CASE EXPANSION: Insights for Australian Consumers

Syllabus Topic

Option 1: Consumers

Contemporary issues concerning consumers

• marketing innovations

The marketing landscape is in a constant state of evolution, shaped by technological advancements, shifting consumer behaviours, and emerging regulatory frameworks. In Australia, understanding these contemporary issues is crucial for consumers to make informed choices in an increasingly digital marketplace. This article explores key topics, ranging from regulatory challenges to sustainability concerns, that Australian consumers need to be aware of to navigate the complexities of modern marketing.

Case Study: Scrutiny of influencers and businesses for misleading advertising and online reviews  

Key Facts

• Incident: The Australian Competition and Consumer Commission (ACCC) conducted a sweep of 118 social media influencers, discovering that 81% potentially engaged in misleading advertising under the Australian Consumer Law.
• Legal Issue: Whether social media influencers and businesses are complying with Australian Consumer Law regarding advertising transparency and honesty.
• ACCC Finding: The findings indicate a significant number of influencers may not be adequately disclosing their relationships with brands or the promotional nature of their content. Many influencers reviewed did not clearly disclose when they were being compensated to promote products or services. Additionally, vague terms like 'sp' and 'spon' were often used instead of 'sponsored,' making it challenging for consumers to identify advertising content.

Case Findings

• Consumer protection: Contract-related issues such as disclosing brand relationships, adhering to advertising standards, and ensuring compliance with consumer protection laws. Contracts often detail requirements for disclosure and compliance. Exclusion clauses may be used to limit liability in cases of misleading advertising.
• Legal precedent: According to the Australian Consumer Law, both influencers and businesses must refrain from misleading or deceiving consumers, including when influencers participate in commerce or brands and marketers collaborate with them for online advertising.

Case Study: ‘Greenwashing’ Unsubstantiated Environmental Claims

Key Facts

• Investigation Scope: The Australian Competition and Consumer Commission (ACCC) Conducted an internet sweep targeting 247 businesses suspected of ‘greenwashing’ – making deceptive or misleading environmental or sustainability claims.
• Findings: 57% of businesses were flagged for making questionable environmental claims. The highest proportion of concerning claims is found in the cosmetic, clothing and footwear, and food and drink sectors.
• Obligations: Businesses making assertions such as 'environmentally friendly,' 'green,' or 'sustainable' must substantiate these claims with credible scientific evidence, transparent supply chain data, trusted third-party certification, or other valid forms of proof.
• ACCC’s Priorities: In accordance with the 2022-23 Compliance and Enforcement Priorities, the ACCC is focusing on addressing consumer and fair-trading concerns regarding environmental and sustainability assertions.

Case Study: Australian Competition and Consumer Commission v Samsung Electronics Australia Pty Ltd [2022] FCA 875 

Key Facts

• Incident: Between March 2016 and October 2018, Samsung Australia  in trade or commerce, in connection with the promotion of the supply of Galaxy phones
• Legal Issue: The court declared they were found to engage in conduct that was misleading or deceptive, made false or misleading representations that the Galaxy phones had performance characteristics, and engaged in conduct that was liable to mislead the public as to the water suitability of the Galaxy phones
• Findings: Penalties for Samsung Australia paid to the Commonwealth of Australia pecuniary penalties of $14 million in line with Australian Consumer Law.

Case Effect

• Legal Precedent: The penalty serves as a stark reminder to businesses: all product claims must be backed by evidence. The ACCC will persist in taking action against businesses misleading consumers with product claims.

ORIGINAL ARTICLE

Sources

Australian Competition and Consumer Commission: ACCC’s continuing scrutiny of influencers

Australian Competition and Consumer Commission: Conducting an investigation in 2023

Federal Court of Australia: Australian Competition and Consumer Commission v Samsung Electronics Australia Pty Ltd [2022] FCA 875

Australian Competition and Consumer Commission: The Federal Court penalized Samsung Electronics Australia Pty Ltd