When Good Marketing Goes Bad: Misleading Conduct and the Law

Credit: Oleg Laptev (Unsplash)

When Good Marketing Goes Bad: Misleading Conduct and the Law

Making claims with the law

You have a great product. You know it works. You have seen it perform brilliantly in testing. So when it comes time to write the marketing copy, the words flow easily. Best in class. Revolutionary. Faster than anything else on the market. Results in minutes.

Then someone mentions Australian Consumer Law.

Suddenly those confident claims feel less straightforward. Can you say what you want about your own product? Where is the line between persuasive marketing and misleading conduct? And why does it sometimes feel like the rules are designed to stop you from saying anything interesting at all?

This article explains how misleading conduct laws work in practice — and where businesses sometimes get it wrong.

We like to remind clients that Australian Consumer Law does not prevent you from promoting your product enthusiastically. What it does do is hold you accountable for the expectations you create in consumers’ minds. The test is not whether your claims are technically accurate under perfect conditions but whether ordinary people, encountering your marketing in the real world, would form false expectations about what they are actually going to experience.

The other message is that many businesses only realise there is an issue after complaints or regulator attention. A short legal review of marketing before launch can often prevent those problems entirely.

Misleading or deceptive conduct claims are a common focus of enforcement activity by the Australian Competition and Consumer Commission. They also fuel consumer complaints, refund demands and reputational damage that can undermine a product launch before it gains momentum. Understanding how the law actually works is not about being cautious. It is about being strategic and when needed, getting good legal advice.

The starting point is Section 18 of the Australian Consumer Law.

This section prohibits conduct that is misleading or deceptive or is likely to mislead or deceive. That sounds simple enough until you realise it applies to almost everything a business communicates publicly. Marketing materials, packaging, website copy, social media posts, product demonstrations, even things sales staff say to customers. If it creates an impression in someone’s mind about your product, it is potentially caught under this law.

Then there is Section 29 of the Australian Consumer Law. This section prohibits specific types of false or misleading representations about goods or services. We are talking about performance characteristics, quality, benefits, sponsorship, price comparisons and availability and the like. Between Section 18 and Section 29 of the Australian Consumer Law, the net is cast fairly wide.

But the critical question is always the same. Would this conduct mislead a reasonable consumer?

The answer is rarely straightforward. There are a number of factors involved in determining this, and the courts have made it clear that the assessment is grounded in how consumers actually behave in the real world — not in theory.

Importantly, the law does not assume the consumer is unusually careful or highly analytical. Nor does it assume they are completely gullible. The classic formulation is that the “ordinary or reasonable consumer” falls somewhere in between. As explained by the High Court in Campomar Sociedad Limitada v Nike International Ltd, the test is to be applied by reference to ordinary members of the relevant class of consumers, taking into account how such consumers would respond in practice.

This means the court is not looking at how a lawyer, or even a particularly careful reader, would interpret the wording. It is looking at the impression likely to be formed by real people in everyday circumstances.

A number of key principles flow from this.

First, courts look at the overall impression created by the conduct, rather than analysing individual words in isolation. This was reinforced in Butcher v Lachlan Elder Realty Pty Ltd. A business cannot rely on fine print or disclaimers to correct a misleading headline if the dominant message remains misleading.

Second, intention does not matter. A business can act honestly and still breach the law if the effect of its conduct is misleading. This was made clear in Yorke v Lucas.

Third, context is critical. The target audience, the medium used, and the surrounding circumstances all influence how a representation is understood. A statement made in a detailed technical document may be interpreted differently from the same statement made in a short social media advertisement.

Finally, silence can mislead. If there is a reasonable expectation that relevant information would be disclosed, failing to include it may create a misleading overall impression.

All of this underscores a simple but important point: the test is practical, not theoretical. It asks what real consumers are likely to take away — often in a quick, imperfect reading — rather than what could be argued under close legal scrutiny.

Eco claims on packaging must match the legal reality. Credit: Alex Shuper (Unsplash)

So how does this play out in practice?

Absolute Claims

A skincare brand promotes its product as delivering “results in minutes” and being “clinically proven to work for all skin types”.

Sales increase quickly. But complaints follow. Many consumers report that results take longer — or do not occur at all.

The issue is not that the product never works. It is that the claim creates a strong, absolute expectation that ordinary consumers will achieve fast and consistent results. Without evidence that typical users will experience that outcome, the claim is likely to be misleading.

This reflects real ACCC enforcement. In ACCC v Reckitt Benckiser (Australia) Pty Ltd, products were marketed as targeting specific types of pain (for example, back pain or migraine), when in fact they were essentially the same. The Court found that this created a misleading impression about performance and suitability.

ACCC media releases:

Absolute or highly specific claims must reflect what ordinary consumers will actually experience — not just what is technically possible.

Case Study 2: “Made in…” and Food Origin Claims

A food brand markets its product as “Made in Australia using local ingredients”, supported by Australian imagery and branding.

In reality, key ingredients are imported and only limited processing occurs locally.

Consumers are left with the impression the product is predominantly Australian — and that impression influences purchasing decisions.

Country of origin claims are assessed based on the overall impression created, not just whether individual elements are technically accurate.

This has been the subject of ACCC enforcement. In ACCC v Kimberly-Clark Australia Pty Ltd, products labelled “Made in Australia” were found to be misleading because the cotton used was largely sourced from overseas.

ACCC media releases:

The key point is that origin claims must reflect the real substance of the product — not just part of the process.

What can we learn?

What these examples show is that misleading conduct law is not about technical accuracy in isolation. It is about the impression created in the minds of consumers. More often than not, small wording choices can significantly change that impression — and therefore the legal risk.

In many cases, the difference between compliant and misleading conduct comes down to a few words.

For businesses, the safest approach is to step back and ask: what would an ordinary consumer actually think this means? Not what was intended — but what is likely to be understood.

That is not always easy to assess internally. It often requires an external, experienced perspective.

At Sharon Givoni Consulting, we regularly advise on Australian Consumer Law compliance, including reviewing marketing campaigns, product claims and responding to ACCC enquiries. These issues are rarely black and white, and getting clarity early can prevent costly problems later.

If you are preparing marketing materials or making strong claims about your products or services, it is worth getting that wording checked before you publish — not after issues arise.

When Good Marketing Goes Bad: Misleading Conduct and the Law

When Good Marketing Goes Bad: Misleading Conduct and the Law

Making claims with the law

So how does this play out in practice?

ACCC media releases:

Case Study 2: “Made in…” and Food Origin Claims

ACCC media releases:

What can we learn?

Further reading