If your business markets, prices or sells goods or services to Australian customers, you are bound by the Australian Consumer Law (the ACL), which sits in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the CCA). Its central trading rule is simple to state and easy to trip over: you must not engage in conduct that is misleading or deceptive, or is likely to mislead or deceive. You do not need to have intended to mislead anyone, and you do not need to have told an outright lie.
This article sets out who that obligation applies to, the standard your marketing and sales conduct is judged against, the representations that are banned outright, and what is at stake if you breach the rules. It closes with a compliance checklist and the situations where legal advice is worth getting early.
Who the obligation applies to
The core prohibition in s 18 of the ACL applies to "a person" acting "in trade or commerce". That means:
- No size threshold: sole traders, startups, family companies and large corporations are all caught. There is no turnover or headcount test to cross.
- Every commercial activity: the rule covers advertising and marketing, websites and social media, pricing and checkout processes, sales calls, invoices, contracts and after-sales communications.
- No intention required: the test is the effect of your conduct, not your state of mind. A careless website, an outdated price list or an overeager sales script can breach the ACL just as easily as a deliberate deception.
- "In trade or commerce" is the one real boundary: purely private conduct, such as a personal sale between friends, sits outside the ACL, but almost anything connected with supplying your goods or services is inside it.
Enforcement sits with the Australian Competition and Consumer Commission (ACCC) at the federal level and the consumer affairs agencies in each state and territory, such as NSW Fair Trading and Consumer Affairs Victoria. They can investigate on their own initiative or in response to complaints, so the obligation extends to how you respond to a customer query as much as to what you publish.
The core rule: no misleading or deceptive conduct
Section 18(1) of the ACL provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. The words "likely to mislead or deceive" matter: nobody has to have actually been misled, only that the conduct had a real tendency to create a false impression.
Conduct is judged by its overall impression
Courts assess the whole of the conduct as it would be understood by an ordinary and reasonable member of the audience it was directed at. In Campbell v Backoffice Investments Pty Ltd [2009] HCA 25, the High Court confirmed that the question is whether the impugned conduct, viewed as a whole, has a tendency to lead that audience into error. Words, images, layout, tone and context are considered together, and no individual sentence needs to be false for the overall impression to be misleading.
The High Court's decision in ACCC v TPG Internet Pty Ltd [2013] HCA 54 is the clearest illustration. TPG advertised "Unlimited ADSL2+ for $29.99 per month", while the condition that customers also had to rent a home phone line from TPG for another $30 a month appeared further down in the advertisement. The court found the "dominant message" of the advertisement was that the entire service cost $29.99, and that the qualifying detail was not prominent enough to correct that impression. Where a headline claim needs qualification, the qualification must be "quite clear and prominent"; fine print that contradicts the headline will not save it.
Silence and omissions can mislead
You can contravene s 18 without saying anything false. If you withhold information that would materially affect a customer's decision, or bury it where a reasonable customer will not see it, the omission itself can be misleading. Common examples include leaving mandatory fees out of an advertised price until checkout, advertising an "unlimited" plan without disclosing caps, or failing to disclose that a "sale" price was never a genuine previous price. The test is the same: what overall impression does the customer reasonably take away?
Promises about the future need reasonable grounds
Statements about future matters, such as delivery times, expected results or projected returns, are treated specially. Under s 4 of the ACL, a representation about a future matter is taken to be misleading if the person making it did not have reasonable grounds for it, and the person is presumed not to have had reasonable grounds unless they can point to evidence to the contrary. In practice, that means being able to show what you relied on when you made a forward-looking claim: the trial data, the supplier's confirmed lead times, or the historical results. If you cannot produce it, the claim is exposed.
The specific bans: false or misleading representations
Alongside the general rule, s 29 of the ACL lists representations that are prohibited in trade or commerce in connection with the supply or promotion of goods or services. Contraventions of s 29 attract pecuniary penalties in their own right, unlike s 18. The banned categories include representations that are false or misleading about:
- Goods: their standard, quality, value, grade, composition, style or model, or their history or previous use, including claims that goods are new when they are not.
- Services: their standard, quality, value or grade.
- Endorsement: sponsorship, approval, performance characteristics, accessories, uses or benefits, and the maker's own sponsorship or affiliation. Unapproved "as seen on" or "recommended by" claims sit squarely here.
- Price: the price of the goods or services, which covers inflated "was/now" comparisons and hidden mandatory charges.
- Support: the availability of repair facilities or spare parts.
- Origin: the place of origin of goods, such as "Australian made" claims that cannot be substantiated.
- Rights: the existence, exclusion or effect of any condition, warranty, guarantee or remedy, including the consumer guarantees under the ACL itself.
Section 29 also deals with testimonials: a representation that purports to be a testimonial is taken to be misleading unless evidence to the contrary is adduced. Publishing a review you know to be fake or misleading, or an influencer endorsement that implies an approval that does not exist, falls inside this provision. There is also a parallel criminal offence regime in Chapter 4 of the ACL, such as s 151, which mirrors the s 29 bans, so serious false representations can carry criminal exposure as well as civil penalties.
What happens if you get it wrong
The consequences depend on which provision is breached, but the enforcement toolbox is broad:
- No pecuniary penalty for s 18 alone: because s 18 sits outside the penalty provisions, a contravention of the general rule is remedied through court orders rather than fines. Those orders include injunctions under s 232 of the ACL, which can be sought by a regulator or any other person, and which can require you to refund money, transfer property, honour a promise or destroy or dispose of goods. Damages under s 236 of the ACL compensate customers or competitors for loss caused by the conduct, and can be recovered against any person involved in the contravention within six years of the loss.
- Pecuniary penalties for s 29: contraventions of the specific representation bans, and other provisions of Part 3-1 of the ACL, attract civil pecuniary penalties under s 224 of the ACL. For a body corporate, the maximum penalty for each contravention is the greater of $100 million, three times the value of the benefit obtained from the conduct, or 30 per cent of adjusted turnover. For an individual, the maximum is $2.5 million per contravention.
- Individual exposure: directors, managers and employees can be pursued personally. The penalty and damages provisions reach people who aided, abetted, counselled or procured a contravention, induced it, were knowingly concerned in it, or conspired in it.
- Public warning notices: regulators can publish a warning about your conduct under s 223 of the ACL where they suspect a contravention and consider it in the public interest to warn consumers.
- No general defence: intention is irrelevant to s 18, and a disclaimer in small print does not cure conduct that is misleading in context. The TPG case shows that a technically accurate statement buried in the fine print will not rescue a false dominant message.
A practical compliance checklist
Run through these items before any campaign goes live:
- Substantiate before you publish: For any objective claim ("fastest", "most durable", "guaranteed results"), keep the evidence on file and make sure it supports the claim as a reasonable customer would read it.
- Test the overall impression: Ask whether an ordinary customer could walk away with a wrong understanding, even if every sentence is technically true.
- Show the real price: Display total prices where practical, never hide unavoidable fees, and make sure "was/now" or "save $X" claims reflect genuine previous prices.
- Back future claims with reasonable grounds: Record what you relied on for delivery times, performance promises and projections before you publish them.
- Keep conditions visible: If an offer has caps, exclusions or conditions, state them clearly and prominently near the claim.
- Manage reviews and endorsements: Do not publish testimonials you know or should know are fake, and disclose paid influencer content.
- Train the team: Sales scripts and customer service calls create just as much exposure as advertising.
- Keep records: Approvals, evidence for claims and training materials are the first things you will be asked for if a regulator or customer raises an issue.
- Keep content current: Assign someone to update prices, features, availability and time-limited offers, and to retire outdated pages.
When to get legal help
For most day-to-day trading, the checklist above is enough. Professional advice is worth getting early in three situations. First, before launching a significant marketing campaign with bold claims, comparative pricing or results-based promises, where the cost of a review is trivial next to the cost of a regulator inquiry. Second, the moment a complaint escalates or the ACCC or a state agency contacts you, whether through a request for information, a substantiation notice or an investigation; how you respond materially affects the outcome. Third, when a specific dispute arises, such as a competitor alleging your advertising misleads, or a customer claim that could become a damages action. A lawyer can assess exposure, review the conduct against the overall impression test, help prepare substantiation for your claims, and negotiate with regulators on your behalf.
The fine print rarely rescues a misleading headline
The duty most often missed is not the deliberate lie; it is the gap between the headline and the qualification. Courts and regulators weigh whether the qualifying information was prominent enough to correct the impression the headline created. A "free" offer with conditions buried in terms, an "unlimited" plan with a cap in a footnote, a $29.99 headline with a mandatory $30 add-on: each is a version of the same failure. This week, pick your three biggest current promotions and ask whether the conditions would be obvious to a reasonable customer who only absorbed the headline. If the answer is no, fix the promotion before a regulator or a customer fixes it for you.