Section 18 of Australian Consumer Law 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 objective of section 18 is to act as a catchall provision that can apply to objectionable conduct. The provision has been interpreted widely in a large number of cases involving different factual circumstances. We’ve examined the application of this section to electricity retailers.
Section 18 prohibits misleading or deceptive conduct but does not, by itself, create a cause of action. The remedy provisions are found in other provisions of the Competition and Consumer Act 2010. This was described by Justice Fox in the decision of Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 at paragraph 348 as follows the section “does not purport to create liability at all; rather [it creates] a norm of conduct, failure to observe which has consequences provided for elsewhere in the same statute, or under the general law.”
While there has been significant caselaw on the interpretation of the misleading and deceptive provisions of Australian Consumer Law it is important to note that it is a statutory text and the factual circumstances of each individual case that is of paramount importance. This was described by Justice Hayne in the case of Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435 as follows “when considering what was said in the reasons for decision in a s 52 case, the description of the relevant conduct is as important as are the facts and circumstances identified as bearing upon whether that conduct was misleading or deceptive.”
For a court to find a breach of section 18 of the ACL, it is not necessary that there has been any loss or damage. However, as the court noted in the case of Astrazeneca Pty Ltd v GlaxoSmithKline Australia Pty Ltd (2006) ATPR 42-106 “evidence of actual misleading or deceptive and steps taken in consequence thereof is… both relevant and important on the question of whether the relevant conduct is” misleading or deceptive.
What is misleading or deceptive conduct
There is no definition of the term misleading or deceptive conduct in Australian Consumer Law. The term has been interpreted by the courts to mean conduct that leads, or is likely to lead, a person or persons into error. Consequently, it is necessary to consider the target audience to whom the representation was directed. There are exceptions, but the general rule is that a party who engages in misleading or deceptive conduct will fall foul of a section 18 regardless of whether or not they intended to deceive and even where they have acted reasonably and honestly.
Section 18 prohibits conduct that not only actually misleads or deceives but conduct that is likely to mislead or deceive. Examples provided by the Australian Competition and Consumer Commission of claims that may mislead or deceive include claims relating to:
- the quality, style, model or history of a product or service
- whether goods that are on sale are new
- the sponsorship, performance characteristics, accessories, benefits or use of products and services
- the need for the goods or services
- any exclusions on the goods or services.
Examples of misleading or deceptive conduct provided by the ACCC include:
- a mobile phone provider signing a consumer up to a contract without telling them that there is no coverage in their region; and
- a company misrepresenting the profits of a work at home scheme or other business opportunity.
It is very common to see ‘fine print’ i.e. terms and conditions usually in small print at the end of an advertising page or bottom of a TV commercial. When considering whether conduct is misleading or deceptive, the overall impression of the representational advertise meant will be considered and as such where that overall impression is misleading, ‘fine print’ will not save conduct from falling foul of section 18.
You can find more information about Consumer Law on the ACCC website. Contact us if you have any questions or require assistance.