We all know what good advertising looks like, don’t we? Or is it that we know what looks absolutely terrible? i.e. Asterisks and other symbols all over the copy, conditional language everywhere, and fine print disclaimers dominating the layout.  Surely it can’t be that hard to execute brilliant creative without ruining the aesthetic with legal compliance? Yes, legal compliance is extremely important, and yes it is absolutely a cornerstone of the trusting relationship between good advertisers and their consumer audiences. Adhering to legal standards not only safeguards consumer interests but also protects agencies and brands from the potentially severe consequences of non-compliance, which amongst others, can include financial penalties and reputational damage.

But, does it have to be so clunky and awkward? Well, the answer is no. However, keeping your material compliant in a way that doesn’t ruin your creative  requires a deep understanding of the various regulations, codes and consumer protection laws that frame the advertising industry’s legal boundaries. Key legislation, such as the Competition and Consumer Act 2010 (Cth) (“CCA”) and Schedule 2 of the CCA, the Australian Consumer Law (“ACL”), require advertisers to create  ads that are truthful, clear, and that can be substantiated or else they risk breaching section 18 or section 29 of the ACL ensuring that consumers can make informed decisions in a market free from misleading practices. In addition, the ACL contains strict pricing laws like the component pricing provisions in section 48 that prevent advertisers from using dodgy drip pricing claims, and these require a minimum total price to be stated. 

In addition to CCA/ACL compliance, the overarching advertising codes (like the AANA Code of Ethics) add additional considerations, and then certain industries have further requirements, such as financial services, motor vehicle, food and beverage, or alcohol.  When you start to digest all of these legal obligations it is easy to see why some lawyers give such conservative advice, and why creatives, suits and lawyers frequently seem to butt heads.

When you start to work through all of the above you see why having a specialist providing proper legal clearance advice is so imperative. The crucial element here is knowing what tweaks may be made to copy, supers and disclaimers that may change the legal ramifications and the resultant compliance burdens. Experienced specialists understand both the importance of adhering to these laws, and the legal and commercial solutions that exist if a slight adjustment is made (ideally, as early in the ideation and creative process as possible). Maybe tweaking that price claim means the component pricing legislation doesn’t apply at all, or maybe an adjustment to the headline means no disclaimer will be required.  Getting a specialist lawyer that is working with you, for you, and without conflict, involved in pre-production, during concepting and storyboarding saves smart agencies and brands time, money, and frustration later. 

When we talk about legal clearance by an expert specialist, not all specialists are created equal. Yes, there are a handful of providers out there who claim to provide “clearance”, but only consider material from their own perspective, or are hopelessly conflicted. There are certain clearance providers that like to charge you good money but are representatives of the free-to-air television broadcasters for instance, how does that work? There are other “clearance” providers who are not even lawyers… how can they possibly analyse and assess compliance with copyright legislation, the obscure provisions of the CCA (i.e. component pricing, resale price maintenance, exclusive dealing, etc), let alone provide legal advice on misleading representations or even proper code compliance? Would you want your client’s campaign, reputation and money to be in their hands?

After all, what happens if we push the boundaries and get it wrong? The Australian Competition and Consumer Commission (“ACCC”) is the primary regulator of the CCA/ACL, and is active in enforcing the rules in this space. Depending on their enforcement prerogatives in any given year, the ACCC may be focused on going after dodgy greenwashing claims, or taking a microscope to an entire market segment like travel agents, airlines, motor vehicle manufacturers, or social media influencers. The market is scattered with real-life case examples where the ACCC has taken enforcement actions for non-compliant advertising practices. These actions not only serve as a deterrent but also as educational tools for the industry, illustrating the tangible consequences of non-compliance, including legal penalties and the potential breakdown of consumer trust. Such cases underscore the important nature of compliance in safeguarding both consumer interests and the integrity of brands, especially since the ACCC’s powers were recently strengthened to issue much larger fines and seek financial penalties, i.e. in the tens of millions of dollars for some contraventions

As advertising channels continue to evolve and expand, agencies must remain adaptable to emerging legal challenges. Staying informed about changes in consumer protection laws and adapting compliance strategies accordingly is essential in navigating the complexities of modern advertising. This forward-looking approach ensures that agencies can continue to harness the full potential of their creative capabilities within the bounds of legal and ethical standards, contributing to a marketplace where transparency, fairness, and innovation thrive, and most importantly, not putting your clients at risk.

The process of substantiating claims is a rigorous one, involving thorough documentation and verification of all assertions made in advertising materials. Agencies must establish robust internal protocols for reviewing and validating the accuracy and compliance of content before it reaches the public eye. This internal vetting process is crucial, acting as a first line of defence against potential legal challenges and ensuring that all advertising messages are both legally compliant and ethically sound, and (again) the earlier this is done, the better.

On top of this, the rise of influencer marketing has introduced nuances in how products and services are promoted. Influencer partnerships, while offering significant reach and engagement, also present compliance risks if endorsements are not clearly disclosed or if influencers make unsubstantiated claims. Agencies must work closely with influencers, educating them on the importance of transparency and the need for clear disclosure of sponsored content to maintain the integrity of advertising messages.

While the ACCC itself has focused on broader sweeps and investigations to ensure compliance across the digital economy, specific instances of action being taken against influencers are more commonly handled by Ad Standards, the advertising industry’s self-regulatory body, under the guidelines set by the Australian Association of National Advertisers (AANA).

The ACCC’s sweep in 2023 targeted over 100 influencers mentioned in more than 150 tip-offs from consumers, focusing on sectors where influencer marketing is particularly prevalent, such as fashion, beauty, health, and technology~. This initiative aimed to identify misleading testimonials and endorsements by influencers, particularly those failing to disclose their affiliation with the products or companies they promote​​.

These actions highlight the increasing scrutiny on influencers to ensure they comply with advertising standards and consumer law, emphasising the importance of transparency in commercial endorsements. The ACCC, along with other regulatory bodies and industry guidelines, is working to protect consumers from misleading or deceptive advertising practices in the rapidly evolving digital marketplace.

To safeguard against these risks, implementing a robust compliance framework is essential. This framework should be built on several pillars:

Regular Training: Agencies must commit to ongoing education for all team members, from creative staff to account managers, ensuring they are well-versed in the latest legal standards and understand their role in maintaining compliance. Training programs should be delivered by legal specialists and cover relevant consumer laws, ethical advertising principles, and case studies that highlight common pitfalls.

Updates on Legal Standards: The legal landscape for advertising is ever-evolving, with new regulations and guidelines emerging in response to technological advancements and changing consumer behaviours. Agencies must establish a system for staying updated on these changes, ideally through legal bulletins and partnerships with firms like Anisimoff Legal specialising in advertising law.

Engagement of Properly Experienced, Specialist Legal Counsel: Developing a close working relationship with legal experts who specialise in advertising law is invaluable.  Good legal counsel can provide preemptive advice on campaign concepts, review advertising materials for potential compliance issues, and offer strategic guidance on navigating complex legal challenges, in addition to getting to know you, your client, and your risk appetites, to deliver useful, commercially-sound legal advice. Their expertise can also be crucial in training sessions, offering a legal perspective to complement the creative and strategic facets of advertising.

Learning from Case Studies: Incorporating real-world examples of both successful compliance and instances of non-compliance into training and strategy discussions can offer practical insights. Analysing these case studies helps agencies understand the real-world application of laws, the reasoning behind regulatory actions, and the strategies companies have employed to address or avoid compliance issues. These lessons can then be applied to future campaigns, helping to mitigate risks before they arise.

Creating a Culture of Compliance: Beyond these practical measures, fostering a culture where compliance is valued as an integral part of the creative process is crucial. This culture encourages open discussions about legal considerations, integrates compliance checks into the workflow, and positions legal adherence as a component of the agency’s brand integrity.

Ensuring advertising compliance with consumer laws is a multifaceted endeavour that intertwines legal knowledge with ethical practice and strategic foresight. It demands vigilance, understanding, and adaptability, empowering agencies to harness the full potential of their creative capabilities within the bounds of legal and ethical standards. Getting this right means  agencies can not only safeguard their interests and those of their clients but also contribute to a marketplace where transparency, fairness, and innovation thrive.

*Note: While this article provides a general overview of compliance with consumer laws in advertising, agencies are encouraged to consult legal experts for specific guidance and to stay updated with the latest legal requirements in their respective jurisdictions.