Are You Accidentally Engaging in False Advertising?

When businesses advertise, they’re trying to positively influence your perception of them.

We all know this is what they’re doing. In fact, exaggerating in advertising is a known and widely accepted technique called “Puffery” (think of the Pufferfish, which enlarges itself to appear more prominent). So, as a business, how do you draw the line between making a favourable impression and being misleading through false advertising?

Smart? Or sneaky?

Take a guess at which of the following are considered to be false advertising from a legal perspective:

• The tagline, “Red Bull gives you wings”.
• A commercial of a photoshopped model demonstrating an Olay skincare product.
• Volkswagen’s statement that their diesel engines are “environmentally friendly”.

They all are! You may be surprised (or satisfied) to learn that these companies were fined billions of dollars. The below examples, however, are considered completely acceptable:

• Apple claiming Siri was their “coolest feature” and an “intelligent personal assistant”.
• PlayStation claimed its third console “Does Everything”.
• Smirnoff’s tagline says it is “The world’s most-liked Vodka”.

These are within the boundaries of the law. So, what’s the difference?

False advertising vs puffery

False advertising (illegal) is making objective statements which are untrue, while puffery (a legal advertising technique) is making subjective statements which cannot be quantifiably disproven. It’s a fine, but clear, line of distinction.

While you may not be a multinational corporation with an excessive advertising budget, there are still risks for small business and not-for-profits alike. The Australian Competition and Consumer Commission (ACCC) takes false advertising very seriously. Organisations of every size need to take heed.

Be extra vigilant

Shockingly, you can even get in trouble for claims that other people make about your business on online review platforms (such as Facebook or Google). For example, if someone makes an untrue claim on your Facebook page, you’re deemed responsible for breaking the law, not the person who posted it! The same goes for false online reviews. The theory — online platforms are the responsibility of the organisation to maintain. Therefore, displaying (or not removing) a false statement is seen as an intention to mislead the public.

Fair advertising is good for business. It’s also a part of ethical marketing and required by law. As such, it’s important to ensure you — and your online communities — are not accidentally engaging in false advertising techniques. Make subjective claims, not objective; unless you’re prepared to back them up!

— Scott Ingram, Director

Make sure you review how you advertise before the ACCC does. For more information, visit Advertising and Promoting Your Business on the ACCC website. Or, engage an expert to ensure you’re above board.