When a Fyre starts to burn: A cautionary tale in marketing

A private island in the Bahamas, an ‘immersive’ music festival experience, return flights on a private jet, luxury eco-friendly villas, world-class gourmet food and partying with supermodels… These were just a few of the representations that organisers made to entice approximately 5,000 ticket holders to attend the Fyre Festival in 2017. This high profile (and extreme!) example of a product or service not matching the marketing hype is a perfect case study for a hypothetical analysis of how the Australian Consumer Law (ACL) would apply if such an event was to occur in Australia. Australian Consumer Law False, Misleading and …

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It’s in the warranty: New mandatory wordings introduced

From 8 June 2019, businesses supplying services or the supply of goods and services together to consumers must include new mandatory text in any warranty issued to consumers against defects in their products. The amendments to the Competition and Consumer Regulations 2010 (Cth) now equip consumers with the same level of protection from warranties against defects for services as they currently do from warranties against defects for the supply of goods. As of June 2019, the following wording must be included in any warranty against defects given in connection with the supply of services, or goods & services: Services Our services …

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Customer data: What you should know

As online channels become an increasingly important part of retail businesses, organisations are increasingly collecting customer data in the course of trade. This information is rich with insights that can be used by organisations to track consumption patterns, effectively target their advertising to particular consumers or particular groups of consumers and directly contact consumers. With significant penalties for non-compliance, it is important for businesses to be aware of legal obligations that apply to dealing with this information. Accordingly, below we set out an overview of key considerations under Australian law. Privacy Handling of Customer Data The handling of customer data is …

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Product labeling update: Country of origin claims

In late 2018, the Federal Court found that imported fish oil and Vitamin D encapsulated in Australia could not be permissibly labelled as ‘Made in Australia’. These proceedings come as a timely reminder for businesses to ensure that any representations made about a product’s country of origin are clear, accurate, can be substantiated and meet mandatory labelling requirements. General – Products other than Food Under the Commerce (Trade Descriptions) Act 1905 (Cth), all products offered for sale, displayed or sold in Australia must be labelled with a trade description including its country of origin. Similarly, labels and packaging must not …

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Returning faulty gifts: New year, new product returns?

There’s always that one present under the tree. It doesn’t quite fit right or maybe doesn’t work once plugged in…Remember to not only remain calm, but both consumers and retailers should also ensure that they are fully aware of their rights and obligations under the Australian Consumer Law (ACL). According to the ACCC website, the Australian competition watchdog received nearly 34,000 contacts about consumer guarantee related issues in 2018 alone – an increase of more than 17 per cent compared to 2017. This article will outline both the rights of consumers and obligations of businesses when dealing with the return …

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Digital marketing update: Shoppable content, unreal and nano influencers, virtual home assistants and ads in messaging apps

In a world of exponential technological growth, consumers make purchasing decisions across an array of media platforms. When developing new methods of delivering a personalised and convenient consumer experience across these platforms, businesses should therefore factor in the risks involved including the application of the Australian Consumer Law (ACL). In this update, we take a look at some of the predicted tech trends for 2019 and flag the associated legal issues you should bear in mind. Shoppable Content – In the footsteps of the Chinese app WeChat, Instagram is expected to roll out an in-app purchase feature this year, allowing users to …

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Marketing warfare series – Part III: Guerrilla marketing

What is guerrilla marketing? Guerrilla marketing involves unconventional or interactive campaigns that take consumers by surprise and typically attract social media attention for being so unexpected. These tactics allow businesses to repurpose their consumers’ environment to include their brand and are particularly attractive to small businesses looking for greater reach and impact at a lower cost than traditional marketing. This type of marketing can take many forms, including: publicity stunts (e.g. flash mobs or world record attempts); brand installations (e.g. giant statues of a product in prominent public places); transformation of everyday items into advertisements (e.g. park benches or dressing up …

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A Christmas credit carol: Advertising consumer credit

As we move into the festive season, personal finance such as credit cards and loans become increasingly attractive to consumers so they can spread the Christmas cheer. Offering finance options are a great way to get customers through the door, however, businesses should be aware of requirements that apply to advertising consumer credit under the National Credit Code (NCC), which is contained in Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth). Applicability The NCC is regulated by Australian Securities and Investments Commission (ASIC) and applies to ‘credit contracts’.  These are agreements that have the following features: the …

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Marketing warfare series – Part II: Comparative advertising

A strategy often used by competing brands is comparative advertising. With numerous cases brought in the Federal Court of Australia each year and the potential for considerable pecuniary penalties, businesses should approach this strategy with caution. What is comparative marketing? Comparative advertising is, as its name suggests, an advertisement that compares a product or service with the equivalent offering of a competitor. This is usually done to highlight limitations of the competing offering and demonstrate the promoted offering’s superiority. Businesses may draw comparison with the competing offering: directly – by referring to, or displaying the offering e.g. use of images …

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Marketing warfare series – Part I: Ambush marketing

To get an edge over competitors, businesses often resort to aggressive marketing and advertising strategies to promote their products. While these campaigns are usually creative, amusing to consumers and highly effective for attracting publicity, they can have unforeseen consequences, such as agitating a competitor into taking action against the aggressor. In this series (this is the first of three posts), we consider various ‘marketing warfare’ strategies that are commonly used by businesses, the risks of employing these strategies, and what can be done to combat the practices. In this post, we consider ambush marketing. What is ambush marketing? Ambush marketing …

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International product safety week – Product safety risks in e-commerce

We all know how convenient it is to shop online (particularly today with the Black Friday sales!), but we often don’t think about the risks involved.  We can’t touch the product, we can’t see it with our own eyes, and sometimes we are uncertain as to the true identity of the seller.  Yet nine times out of ten, we probably still buy it! Last week (12-16 November) was International Product Safety Week.  Australia’s national competition and consumer law regulator, the Australian Competition and Consumer Commission (ACCC) joined an international campaign lead by the OCED (Organisation for Economic Co-operation and Development) …

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Consumer law update: Headline pricing and expanded investigatory powers

On 26 October 2018, the Treasury Laws Amendment (Australian Consumer Law Review) Act 2018 (Cth) came into effect, amending a number of key provisions of the Australian Consumer Law (ACL) and extending investigatory powers available to the Australian Consumer and Competition Commission (ACCC) and Australian Securities and Investments Commission (ASIC). This comes as a timely reminder for businesses to ensure compliance with the ACL and particularly the changes to headline pricing practices. Headline pricing From 26 October 2019, vendors (i.e. any business or individual selling goods or services) will be required to include all optional fees and charges that are …

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New federal gift card regulations

Ever find a gift card in your wallet from last Christmas, only to find out it’s already expired? The Federal Government is introducing new regulations that will make the rules relating to gift cards more consumer friendly.  Back in June this year, we reported on the changes to requirements for gift cards sold in NSW, which is available here. The newly released draft regulations and explanatory statement are contained in the Competition and Consumer Amendment (Gift Cards) Bill 2018 (Cth) (the Gift Cards Bill), which was undergoing  public consultation until the end of October. The Gift Cards Bill introduces three key requirements, including …

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China Update: “Daigou” marketing and brand protection

As one of the largest retail markets in the world, China has become a highly desirable destination for businesses to advertise and sell their products. Over the past few years, test marketing through “Daigou” (“代购”) has become a popular way for Australian businesses to measure potential demand in the Chinese market and decide whether to commit to full entry. However, this can be highly risky for brand owners that have not developed a Chinese brand and/or secured their IP position in China. Below, we set out a number of risks that brand owners should consider prior to using “Daigou” marketing, and …

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Cosmetics Labelling Guide Released by ACCC

Recently, the Australian Consumer and Competition Commission (ACCC) released a guide on labelling requirements that apply to cosmetics products sold in Australia. This comes as a timely reminder for businesses that produce and supply cosmetics products to ensure that they comply with mandatory standards under the Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991 (Cth) (the Mandatory Standards). Application of the Mandatory Standards The Mandatory Standards apply to cosmetics products, which are classified as any substance or preparation intended for placement in contact with any external part of the human body, including the mouth and teeth, that functions to: …

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