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Chapter 24 - Advertising law. At the end of this chapter you should understand: the nature and impact of advertising on the market place, the significance of advertising on consumer demand, the role of the Australian Association of National Advertisers, the contents of the Advertiser Code of Ethics,…
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Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning Copyright © 2000 McGraw-Hill Australia Advertising law Chapter 24 Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning Advantages of advertising Provides information to consumers to allow efficient choices Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-3 Copyright © 2000 McGraw-Hill Australia Product packaging and labelling • Common Law protection • Statutory protection Trade Practices Act 1974 (Cwlth) - Misleading and deceptive conduct - Unfair trade practices - Product safety and information standards Trade Measurement legislation - National Measurements Act 1960 (Cwlth) Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-4 Copyright © 2000 McGraw-Hill Australia Disadvantages of advertising Without regulations: • Can provide false information • May discourage smaller competitors entering the market • Can offend public • May invade privacy • Can be defamatory • Can infringe on intellectual property Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-5 Copyright © 2000 McGraw-Hill Australia Advertising Self Regulation of Advertising by Industry Advertising Standards Bureau Ltd: • AANA Advertiser Code of Ethics • Advertising Standards Board • Advertising Claims Board Advertising Federation of Australia Code of Practice Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-6 Copyright © 2000 McGraw-Hill Australia AANA Advertiser Code of Ethics Voluntary 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 to competitors Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-7 Copyright © 2000 McGraw-Hill Australia The Advertising Standards Board • Maintains standards of taste and decency in advertising Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-8 Copyright © 2000 McGraw-Hill Australia The Advertising Claims Board Alternative dispute resolution for: – Truth and accuracy of advertising – Breaches of AANA Advertising Code of Ethics Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-9 Copyright © 2000 McGraw-Hill Australia Advertising Federation of Australia Code of Practice • Statement of ethics • Code of practice (for member agencies’ relationship) Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-10 Copyright © 2000 McGraw-Hill Australia Other voluntary codes regulating advertising Advertising Direct Marketing Association (ADMA) Rights for consumers • A seven day cooling-off period • An independent code authority with consumer representatives • Adoption of national privacy principles established by the federal Privacy Commissioner • Imposition of limits on telemarketing • Compulsory use of a system which allows consumers to register their decision not to receive direct marketing offers from ADMA members Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-11 Copyright © 2000 McGraw-Hill Australia Direct marketing • • • • ADMA Code of Practice Australian Press Council Australian Broadcasting Authority Federation of Australian Radio Broadcasters (FARB) • Federation of Australian Commercial Television Stations (FACTS) Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-12 Copyright © 2000 McGraw-Hill Australia Advertising Statutory regulation of advertising: -Trade Practices Act 1974 (Cwlth) Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-13 Copyright © 2000 McGraw-Hill Australia Australian Competition and Consumer Commission Responsibilities: • Undertakes price surveillance • Holds inquiries into the supply of specified goods and services • Monitors the prices, costs and profits of any industry or business, as directed by the relevant minister Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-14 Copyright © 2000 McGraw-Hill Australia “Major Australian Marketing Law” legislation • Trade Practices Act – Federal legislation that regulates company conduct • Sale of Goods Act ACT – State legislation that regulates contracts Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-15 Copyright © 2000 McGraw-Hill Australia “Major Australian Marketing Law” legislation (continued) • Fair Trading Act – State 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 business! Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-16 Copyright © 2000 McGraw-Hill Australia “Competition” laws Prevent anti-competitive practices e.g • Collusion • Takeovers/mergers that create monopoly situations (e.g NM/ANZ) • Collective boycotts Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-17 Copyright © 2000 McGraw-Hill Australia Trade 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 Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-18 Copyright © 2000 McGraw-Hill Australia Common Law • Law 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 - Defamation • Right of privacy • Right of publicity Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-19 Copyright © 2000 McGraw-Hill Australia Tort 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 Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-20 Copyright â 2000 McGraw-Hill Australia Tort of injurious falsehood ã Slander of goods – A 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 Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-21 Copyright © 2000 McGraw-Hill Australia Passing off • The 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 Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 24-22 Copyright © 2000 McGraw-Hill Australia ... McGraw-Hill Australia Common Law • Law 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 - Defamation • Right of privacy • Right of publicity Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. .. a loss of business Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 2 4- 21 Copyright © 2000 McGraw-Hill