Which of the following is an example of false advertising
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Under Section 43(a) of the Lanham Act, a claim can be made against a defendant for false or misleading advertising. For a claim against a defendant for false advertising, the following elements are met and the plaintiff must show: (1) defendant made false or misleading statements as to his own products (or another’s); (2) actual deception, or at least a tendency to deceive a substantial portion of the intended audience; (3) deception is material in that it is likely to
influence purchasing decisions; (4) the advertised goods travel in interstate commerce; and (5) a likelihood of injury to plaintiff. However, the plaintiff does not have to prove actual injury.
What the ACCC does
What the ACCC can't do
Businesses mustn't mislead consumersBusinesses should be honest in their dealings. Businesses shouldn't try to gain an unfair advantage by making misleading claims about their products or services. It makes no difference whether a business intends to mislead or not. Information must be accurate and truthfulAny information or claim that a business provides about its products or services must be accurate, truthful and based on reasonable grounds. This includes:
This rule applies to any communication by a business, including through:
Any statement that creates a false impression about goods and services can be breaking the law. Case study of a misleading claimIn June 2022, Samsung Electronics Australia Pty Ltd was ordered by the Federal Court to pay $14 million in penalties for misleading water resistance claims about its mobile phones. Samsung admitted to the court that its ads misrepresented the water resistance of its phones. Samsung published 9 ads online and in-store. The ads showed the use of various Samsung Galaxy phones in pools and sea water. One Samsung ad showed a person surfing alongside the statement: “Do everything you love this summer on the Galaxy A5. Whether its listening to your favourite song by the pool or capturing your Sunday surf session at the beach”. Pool and sea water could, in fact, damage the phones by corroding the charging ports. Read more in the ACCC media release about Samsung. Silence can be misleadingIn some circumstances, failure to disclose information can be misleading. This is particularly the case if a business provides some information to a consumer but doesn't mention important details the consumer should know that are relevant to their decision. Example of silence being misleadingA buyer wants to purchase a car for a particular purpose and he tells this to the car dealer. The car dealer knows the car isn’t suitable for John's purpose, but doesn’t say this. The car dealer's silence can amount to misleading conduct. Wildly exaggerated claims (puffery) can be misleading‘Puffery’ refers to wildly exaggerated and vague claims about a product or service that no one could treat seriously. For example, a restaurant claims they have the ‘best steaks on earth’. These types of statements are generally not considered misleading. Price claimsPrice is an important factor in consumer decision making. Businesses should take extra care not to make misleading statements about price. This may happen if products are:
A business shouldn’t mislead customers about savings on products or services. For example, a business may advertise a sale by using statements such as 'WAS $275 NOW $149'. This implies the buyer will save the difference between the higher and lower price. The advertised savings may be misleading or deceptive if the product or service:
Find out more about misleading prices and price displays. Fine print and qualificationsMany advertisements include some information in fine print. This information must not conflict with the overall message of the advertisement. Examples of information in fine print being misleading
Comparative advertisingSome advertisements may compare products or services to others on the market. Comparisons may be about any factors including:
Comparative advertising can be misleading if:
Bait advertisingBait advertising is the practice of promoting prices, often ‘sale’ prices, on products that are:
It is not misleading if the business is upfront and clear about the product being:
Country or place of originIt is illegal to make false or misleading claims about country or place of origin. Find out more about country or place of origin claims. Premium or benefit claimsA business must be able to prove a claim of a product having a particular quality or benefit. Premium claims may suggest a product:
A premium claim may also promote a product as being of a perceived quality. For example, ‘Swiss chocolate’ or ‘Belgian beer’. Premium claims should be true, accurate and based on reasonable grounds. Businesses can take steps to make sure they don't make a false or misleading claim. What a business shouldn’t doBusinesses shouldn’t:
Don’t make false claims about:
What a business should doBusinesses should:
Businesses must also consider how any claims they make may impact on consumers experiencing vulnerability. For more information, download the guide Consumer vulnerability: A business guide to the Australian Consumer Law. Penalties for false or misleading claimsThere can be penalties for businesses that mislead consumers. Find out more about the penalties that may apply. Online product and service reviews Social media promotion Unfair business practices Country of origin claims What is an example of a false or misleading representation?Courts have found false and misleading representations in these cases - a: manufacturer sold socks, which were not pure cotton, labelled as 'pure cotton' retailer placed a label on garments showing a sale price and a higher, crossed-out price. However, the garments had never sold for the higher price.
Why is false advertising unethical?Advertising that promotes a service or product in a deceptive manner is unethical because it doesn't provide consumers with all the information they need to make a good decision. Consequently, consumers might waste money on products or services they neither need nor want.
Is false advertising a crime in the US?Yes, it is considered a crime to falsely advertise. It is illegal for a business of any type or size—solopreneur, small business, large corporation, non-profit—to purposefully publish an ad that is false or contains untrue, misleading, or otherwise deceptive statements or claims.
Can you get a refund for false advertising?You have the legal right to a refund if: you feel you were unfairly pressured into buying a product or service you didn't want. you were misled about the product or service you bought.
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