Kinh tế học - Chapter 24: Advertising law

This is the prescribed textbook for your course.Available NOW at your campus bookstore!Copyright © 2000 McGraw-Hill AustraliaAdvertising lawChapter 241Copyright © 2000 McGraw-Hill AustraliaAdvantages of advertisingProvides information to consumers toallow efficient choices. 2Copyright © 2000 McGraw-Hill AustraliaProduct packaging and labellingCommon Law protectionStatutory protection Trade Practices Act 1974 (Cwlth)- Misleading and deceptive conduct- Unfair trade practices- Product safety and information standardsTrade Measurement legislation- National Measurements Act 1960 (Cwlth)3Copyright © 2000 McGraw-Hill AustraliaDisadvantages of advertisingWithout regulations:Can provide false informationMay discourage smaller competitors entering the marketCan offend publicMay invade privacyCan be defamatoryCan infringe on intellectual property 4Copyright © 2000 McGraw-Hill AustraliaAdvertisingSelf Regulation of Advertising by IndustryAdvertising Standards Bureau Ltd:AANA Advertiser Code of EthicsAdvertising Standards BoardAdvertising Claims BoardAdvertising Federation of Australia Code of Practice 5Copyright © 2000 McGraw-Hill AustraliaAANA Advertiser Code of EthicsVoluntary code to ensure that all advertisements are legal, decent, honest and truthful, and that they have been prepared with a sense of obligation to the consumer and society,and a fair sense of responsibility tocompetitors. 6Copyright © 2000 McGraw-Hill AustraliaThe Advertising Standards BoardMaintains standards of taste and decency in advertising7Copyright © 2000 McGraw-Hill AustraliaThe Advertising Claims BoardAlternative dispute resolution for:Truth and accuracy of advertisingBreaches of AANA Advertising Code of Ethics8Copyright © 2000 McGraw-Hill AustraliaAdvertising Federation of Australia Code of PracticeStatement of ethicsCode of practice (for member agencies’ relationship)9Copyright © 2000 McGraw-Hill AustraliaOther voluntary codes regulating advertisingAdvertising Direct Marketing Association (ADMA) Rights for consumersA seven day cooling-off periodAn independent code authority with consumer representativesAdoption of national privacy principles established by the federal Privacy CommissionerImposition of limits on telemarketingCompulsory use of a system which allows consumers to register their decision not to receive direct marketing offers from ADMA members 10Copyright © 2000 McGraw-Hill AustraliaDirect marketingADMA Code of PracticeAustralian Press CouncilAustralian Broadcasting AuthorityFederation of Australian Radio Broadcasters (FARB)Federation of Australian Commercial Television Stations (FACTS)11Copyright © 2000 McGraw-Hill AustraliaAdvertisingStatutory regulation of advertising: -Trade Practices Act 1974 (Cwlth)12Copyright © 2000 McGraw-Hill AustraliaAustralian Competition and Consumer Commission Responsibilities:Undertakes price surveillanceHolds inquiries into the supply of specified goods and servicesMonitors the prices, costs and profits of any industry or business, as directed by the relevant minister.13Copyright © 2000 McGraw-Hill Australia“Major Australian Marketing Law” legislationTrade Practices Act Federal legislation that regulates company conductSale of Goods Act ACTState legislation that regulates contracts 14Copyright © 2000 McGraw-Hill Australia“Major Australian Marketing Law” legislation (continued)Fair Trading ActState legislation that regulates the conduct of individuals (very similar provisions to that of the Trade Practices Act for companies).N.B. Multinationals must be aware of the different legislation operating in each country in which they do business!15Copyright © 2000 McGraw-Hill Australia“Competition” lawsPrevent anti-competitive practicese.g.CollusionTakeovers/mergers that create monopoly situations (e.g. NM/ANZ)Collective boycotts16Copyright © 2000 McGraw-Hill AustraliaTrade Practices Act 1974 (Cwlth)S52: Prohibition on misleading and deceptive conduct.S53: Prohibition on making false representations in connection with the supply or promotion of goods and services.S55 & 55A: Prohibition on conduct that is liable to mislead the public as to the nature, characteristics and suitability for purpose, or the quality of any goods or services, or the manufacturing process of any goods or services.17Copyright © 2000 McGraw-Hill AustraliaCommon LawLaw of Contract - Breach of Contract (where purchaser can show he/she entered contract based on a false statement) Law of Torts - Tort of deceit - Negligence - Tort of injurious falsehood - Passing off - DefamationRight of privacyRight of publicity18Copyright © 2000 McGraw-Hill AustraliaTort of deceit The representation made in the advertisement is one of fact and not an opinion, prediction or promise.The representation is false. The representation induces the plaintiff to enter into a contract.The advertiser made the representation knowing it to be untrue, or was reckless as to its truth. 19Copyright © 2000 McGraw-Hill AustraliaTort of injurious falsehoodSlander of goodsA false statement is made about the plaintiff.The statement is disparaging of the plaintiff’s goods or services, or method of carrying on a business, or title to property.The statement is made maliciously.The plaintiff suffers, or is reasonably likely to suffer, a loss of business. 20Copyright © 2000 McGraw-Hill AustraliaPassing offThe tort of “passing off” has been committed where one trader causes customers and potential customers to incorrectly associate their products or business with those of another trader, or person. 21Copyright © 2000 McGraw-Hill Australia