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Australian Consumer Law: Misleading conduct

Overview

The statutory prohibition of misleading and deceptive conduct can now be found in s 18 of the Australian Consumer Law (it was previously known as s 52 of the Trade Practices Act). This is one of the most commonly litigated provisions and often accompanies contract-based claims.

Section 18 prohibits a person (including a corporation), acting in trade or commerce, from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive.

 

Misleading and deceptive conduct

The statutory prohibition of misleading and deceptive conduct can now be found in s 18 of the Australian Consumer Law (contained in schedule 2 of the Competition and Consumer Act 2010 (Cth)) (previously the provision was s 52 of the Trade Practices Act and much of the case law - as well as many practitioners - will still refer to 's 52).  Section 18 provides:

18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

The reference to 'trade or commerce' excludes purely private sales but captures most commercial activity. Where a breach of section 18 is established a range of remedies are available including damages and contractual avoidance or variation.

 

Case example

In 2013 the ACCC lost a High Court case relating to misleading and deceptive conduct. The ACCC alleged Google had engaged in misleading or deceptive conduct in relation to its display of sponsored links. The High Court held that Google was not responsible for misleading or deceptive representations contained in the links themselves (they were the responsibility of the advertisers themselves). View High Court Decision in Google Inc v ACCC. The High Court released a brief Press Release stating, in part:

The High Court unanimously allowed the appeal. Google did not create the sponsored links that it published or displayed. Ordinary and reasonable users of the Google search engine would have understood that the representations conveyed by the sponsored links were those of the advertisers, and would not have concluded that Google adopted or endorsed the representations. Accordingly, Google did not engage in conduct that was misleading or deceptive.

 


Further reading

Philip H Clarke, 'The Hegemony of Misleading or Deceptive Conduct in Contract, Tort and Restitution' (1989) 5 Australian Bar Review 109

Arlen Duke, Representations as to the Future under the Proposed Australian Consumer Law (2009) MULR 17