What’s better than winning a claim against one of your competitors for making misleading or deceptive claims in their advertising?
Simple – winning it in 3 months for a fraction of the cost of litigation.
In March this year, Colgate-Palmolive Pty Ltd (Colgate) lodged a complaint with the Advertising Claims Board (ACB). In its complaint, Colgate alleged that Proctor & Gamble Australia Pty Limited (P&G) had breached the AANA Code of Ethics (Code) by making misleading or deceptive representations through its latest advertisement for its Oral B Pro Health product.
The advertisement, which was being broadcast on TV and Youtube, made a number of unflattering comparisons between Colgate Total and the Oral B product. According to Colgate, these comparisons appeared to suggest that:
brushing your teeth with Colgate Total would result in your teeth resembling an apple with a discoloured or decaying core; and
Oral B Pro Health was capable of providing benefits to teeth which penetrated deeper than just the inside of the tooth enamel.
In June 2017, the ACB delivered its determination, upholding Colgate’s complaint and finding that P&G had made misleading and deceptive representations in breach of the Code.
One week later, P&G agreed to modify the advertisement.
What is the ACB and, more importantly, what can it do for you?
The ACB is a competitor-to-competitor dispute resolution body set up as part of a system of self-regulation within the advertising industry. The system is administered by the Advertising Standards Bureau (Bureau). The role of the ACB is to offer an alternative mechanism for dealing with challenges between industry players in respect of advertising that might otherwise lead to litigation. Its key benefits are that it is quick, cost effective and reliable.
Here’s our list of the top 5 things you should know about the ACB:
1. Who makes the determinations?
The ACB is made up of panels of 3 or more lawyers who specialise in Advertising Law and/or Competition and Consumer Law. These panels are appointed on a case-by-case basis, having regard to the availability of individual lawyers and any conflicts of interest.
2. How long does the process take?
The dispute resolution process through the ACB generally takes around 7-8 weeks – from the date when the initial costs are paid, to the date on which the ACB publishes its determination.
3. Who pays for the process and how much does it cost?
The ACB operates on a user-pays basis. The complainant is required to pay upfront:
a) an application fee of $1,100 (incl. GST); and
b) a lump sum representing an estimate of the legal and administrative costs of the process.
4. What types of complaints can be made and what standards are applied to resolve them?
The ACB will accept complaints about most forms of advertising communications, including cinema, internet, print, radio, telecommunications and TV. The ACB does not, however, adjudicate on matters involving labels or packaging for products or public relations communications.
The ACB determines complaints on questions of truth or accuracy in advertising and/or whether a particular advertisement breaches the law, having regard to the Code.
5. How can I be sure that my competitors will adhere to the ACB’s decision?
As mentioned above, the ACB forms part of a self-regulatory system within the advertising industry.
However, that doesn’t mean that the ACB lacks teeth.
This is because the final report issued by the ACB is publicly available. This report will contain information about the advertiser, the product and the subject matter involved, as well as the ACB’s determination of the issues and reasoning behind its decision.
Where an advertiser refuses to modify or discontinue an advertisement which has been found to be in breach of the Code, the ACB can refer the case report to an appropriate government agency, such as the ACCC, and/or forward it to media proprietors.
In this regard, it is important to bear in mind:
a) the composition of the ACB itself – being a panel of at least 3 legal practitioners with considerable experience in relevant fields; and
b) the requirements under the Code – which echo those under Australian consumer laws, including the prohibition on misleading or deceptive conduct.
In light of this, a determination by the ACB can, at the very least, be seen as a warning shot.
The key point is that, when it comes to misleading or deceptive representations in advertising, litigation is not the only avenue.
So, next time you notice one of your competitors making claims about their product and/or one of your products that seem to be overreaching the facts – why not consider referring your complaint to the Advertising Claims Board? It’s as simple as ACB.