Misleading advertising in Australia and your ACL obligations as a business

Every time your business advertises, it takes on the same legal obligation: do not make claims that could mislead or deceive a customer. The rule comes from the Australian Consumer Law (ACL), which is Schedule 2 of the Competition and Consumer Act 2010 (Cth), and it applies to every promotion you run, from a sale banner on your website to a single line in a social media caption.

Getting it wrong is not a quiet risk. The Federal Court ordered Qantas to pay $100 million in penalties in 2024 for selling tickets for flights it had already decided to cancel, and fined the apartment group Meriton $3 million for manipulating online reviews. The obligations themselves, however, are manageable if you understand what the law requires. This guide sets out who must comply, the core duties under the ACL, the penalties for breach, and the practical steps that keep your advertising on the right side of the line.

Who the advertising rules apply to

The misleading advertising provisions of the ACL apply to "a person" acting "in trade or commerce". In practice that means every business that promotes goods or services in Australia, with no minimum size, revenue or turnover threshold. A one-person online store, a partnership, a private company and a national retailer all carry the same obligations.

The rules reach you through two layers of law. The Commonwealth applies the ACL directly to corporations, and state and territory legislation applies the same provisions to individuals, sole traders and partnerships, so coverage is uniform across the country. The Australian Competition and Consumer Commission (ACCC) enforces the law nationally, while state and territory fair trading regulators handle matters in their own jurisdictions. Financial products and services, such as managed funds and superannuation, sit under a parallel regime in the Australian Securities and Investments Commission Act 2001 (Cth), which ASIC enforces using the same misleading conduct standards.

The threshold that matters is not business size but whether the activity is "in trade or commerce". Advertising, selling and promoting your products sits squarely within it, and so do the messages of employees, influencers, affiliates and suppliers who promote on your behalf. Their mistakes are your mistakes.

The core duty: do not mislead or deceive

Section 18 of the ACL is the general prohibition: a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. It is deliberately broad and covers anything you say or imply in an advertisement, on product packaging, in an email, in a sales script or on your website.

Three features of s 18 catch businesses out:

• Intent is not required: A claim can breach s 18 even if you genuinely believed it was true. The law looks at the effect of the conduct, not your state of mind.
• The test is the audience, not you: The question is whether the ordinary or reasonable member of the audience you are targeting would be misled. What a technical expert would understand is beside the point if your customers would read the claim differently.
• The overall impression counts: In Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54, the High Court confirmed that courts assess the overall impression an advertisement creates, not each sentence in isolation. Fine print buried in a footer cannot rescue a headline that creates the wrong impression.

The second duty: no false representations

Section 29 of the ACL sets out the specific representations you must not make in connection with supplying or promoting goods or services. Unlike s 18, a breach of s 29 directly attracts pecuniary penalties. The list includes false or misleading representations about a product's standard, quality, value, grade, composition or model, whether goods are new, the price, the place of origin, sponsorship or approval, the need for the goods, and the existence or effect of warranties, guarantees, rights or remedies.

In practice, several of these categories generate most of the enforcement activity:

• Pricing claims: A "was $99, now $49" banner only works if $99 is a genuine price you actually charged for a reasonable period before the promotion. Keep the pricing history to prove it. The ACCC's guidance on false or misleading claims treats a discount as genuine only where the reference price reflects what customers were really asked to pay.
• Performance and quality claims: "Removes 99% of stains", "30% more efficient", "best on the market". Every factual claim needs sound, current evidence you can produce if challenged.
• Country of origin claims: "Australian made" and "locally sourced" must reflect your actual manufacturing and supply chain, not your intentions.
• Guarantee claims: Telling a customer "no refunds" or offering a "limited warranty" that ignores their rights misleads them about what the law actually gives them. Section 29(1)(m) prohibits false representations about guarantees and remedies, and s 64 of the ACL goes further: any contract term that tries to exclude or restrict the consumer guarantees is void.

The pricing duty: one honest, complete price

Pricing is the most scrutinised area of advertising, and the ACL gives it its own rules. Section 48 of the ACL requires that if you quote any part of the price, you must also state the single price, prominently and as one figure. This is the provision behind the crackdown on drip pricing, where a business advertises a low headline price and then adds unavoidable booking, service or delivery fees during checkout. Every mandatory fee must be inside the displayed single price.

Two qualifications matter. Postage and delivery charges can sit outside the single figure, but only if you disclose them separately rather than springing them on the customer at payment. And under s 47 of the ACL, if goods carry more than one displayed price, you must sell them at the lowest one. A shelf ticket at $49 next to a scanner price of $55 is a breach in itself, quite apart from any question of deception.

Scarcity claims get the same treatment. "Only 3 left" or "ends midnight" must be true at the time you publish them. False urgency is a representation about availability and value, and regulators treat it as misleading.

The evidence duty: substantiate every claim

You must be able to back every factual claim with evidence, and you must hold that evidence before you publish, not after a complaint arrives. The ACCC can issue a substantiation notice requiring you to produce the information and documents that support a claim, on a tight deadline, and failing to respond properly is itself an offence.

Environmental claims deserve special attention. In its 2022 internet sweep the ACCC found that 57 per cent of the businesses reviewed were making potentially misleading environmental claims, and it followed up in December 2023 with a guide to making environmental claims for business. Broad phrases like "eco-friendly" or "sustainable" need a clear, verifiable basis, and vague or aspirational wording is a known target. The financial services sector shows how far enforcement can go: in Australian Securities and Investments Commission v Vanguard Investments Australia Ltd (No 2) [2024] FCA 1086, the Federal Court ordered Vanguard to pay $12.9 million in penalties for misleading statements about the environmental and social credentials of one of its funds, along with an adverse publicity notice.

The reviews duty: keep endorsements genuine

Reviews and testimonials are treated as representations, and the law is unforgiving. Section 29(1)(e) and (f) prohibit false or misleading testimonials, and s 29(2) adds a presumption: a representation that purports to be a testimonial is taken to be misleading unless you adduce evidence to the contrary. In practical terms, the burden lands on the business to show a review is genuine.

The consequences are real. In Australian Competition and Consumer Commission v Meriton Property Services Pty Ltd [2018] FCA 1125, Meriton was ordered to pay $3 million in penalties after the Federal Court found it had manipulated reviews of its serviced apartments on TripAdvisor, funnelling recent guests into leaving positive reviews and masking the addresses of reviewers who posted negative ones, so the results read like independent customer feedback.

The same logic extends to influencers and affiliates. An undisclosed paid endorsement can mislead customers into thinking a creator genuinely uses and recommends your product. Require disclosure of paid partnerships, brief creators on the claims they may make, and keep approval rights over content that mentions your brand. The same discipline applies to your own moderation: removing offensive or irrelevant reviews is fine, but deleting or curating legitimate negative feedback is not.

What happens if you get it wrong

The ACCC can investigate on its own initiative or after complaints, and it has a range of enforcement tools. For less serious matters it can issue infringement notices with set fines. For serious contraventions it takes court action seeking penalties, injunctions, corrective advertising orders and compensation.

The penalty scale for false representations is substantial. Section 224 of the ACL caps the penalty for each contravention of a Part 3-1 provision such as s 29 or s 48 at, for a body corporate, the greater of $100 million, three times the value of the benefit obtained, or 30 per cent of adjusted turnover during the breach period, and $2.5 million for an individual. The Qantas case shows the scale in operation: the court ordered a $100 million penalty for the continued sale of cancelled flights, alongside an enforceable undertaking under s 87B of the Competition and Consumer Act 2010 (Cth) covering remediation.

Two points are worth understanding about how the provisions interact. Section 18 itself is not a penalty provision, so misleading conduct under s 18 alone is addressed through injunctions, damages, corrective notices and similar orders rather than fines. The same conduct, however, almost always also involves a false representation under s 29, which does carry penalties. And s 18 does not only protect consumers: competitors and suppliers who suffer loss from misleading advertising can sue for damages, so the exposure is not limited to regulator action.

A compliance checklist you can use this month

Work through these seven steps in order, and revisit the list whenever you launch a new campaign:

• Map your claims: List every recurring claim in your advertising: "Australian made", "save 50%", "best seller", "eco-friendly", "fast delivery". Note where each appears and what evidence you hold for it.
• Keep a substantiation file: Store test results, supplier declarations, pricing histories and product specifications in one place, dated and easy to retrieve if the ACCC asks.
• Check pricing before publishing: Confirm the single price includes every mandatory fee, the "was" price is genuine, and no item carries two conflicting displayed prices.
• Review your reviews process: Never post fake reviews, do not curate away legitimate criticism, and disclose any incentive given for a review.
• Brief third parties: Influencers, affiliates and agencies should work from approved claims, disclose paid partnerships, and give you approval rights over content.
• Train your team: Run a short session on the ACL with your own examples, and include anyone who writes copy or answers customer questions about products.
• Correct fast: If a mistake surfaces, pause the promotion, correct the claim, notify affected customers where appropriate and document what you did. Early action reduces harm and demonstrates good faith.

When a lawyer should be involved

Most compliance work is internal: writing clear copy, keeping evidence, and training staff. A lawyer earns their fee at the edges. Engage one before launching high-stakes campaigns with competitor comparisons, environmental claims or heavy discounting, when drafting influencer and affiliate agreements, and when building the review and approval process itself so it matches how your business actually trades. If the ACCC or a state regulator contacts you, whether with a substantiation notice, an infringement notice or an investigation, get advice before responding: what you say and produce in those first exchanges shapes everything that follows. A lawyer can also draft the corrective advertising, customer notifications and any enforceable undertaking if a breach has already occurred.

Start with the claims you cannot prove

The gap between what an advertisement implies and the evidence on file is where penalties come from. Qantas did not set out to deceive; it sold flights it had already cancelled because the internal process did not catch the gap between its advertising and its operations. Meriton did not set out to deceive either; it optimised reviews until the overall impression stopped being honest. The first action to take this week is to open your homepage, your current sale and your best-performing social post, and for every factual claim ask one question: if the ACCC asked for the evidence tomorrow, could you hand it over? If not, reword the claim today. That single habit closes most of the gap between marketing and the law.