A Helpful Guide To Misleading Advertising

How often do you open social media and immediately see a cluster of ads? Furthermore, how unlikely is it that you play a YouTube video that did not have a series of advertisements beforehand? 

Advertising is an integral part of life within the 21st Century. With technological advancement and media consumption at an all time high, we are bombarded with it on a daily basis. Businesses and organizations spend millions of dollars to do this and showcase their products to you. Modern advertising can be defined as

“A paid persuasive communication that uses non-personal mass media-as well as other forms of interactive communication-to reach broad audiences to connect an identified sponsor with a target audience.”

(F Begum)

How often do you encounter a Facebook ad that you’re highly suspectful of? Maybe it’s something advertised by ‘Wish’ that you just don’t believe? 

Deception, defined as “dishonest or illegal methods that are used to get something, or to make people believe that something is true when it is not”, goes hand in hand with advertising. The essence of advertising within modern marketing is simply to sell you a product, where we can clearly see a shift from older ‘perception of advertisements in which they come in the forms of public announcers in the market’ rather than to persuade. Deception can occur within ads

‘‘When consumers acquire demonstrably false beliefs as a function of exposure to an advertisement’’

(Xie, GX., Madrigal, R. & Boush, D.M, 2015)

When discussing deceptive advertising, ethics need to be considered. Advertising ethics has a long history, however the basis of concerns and criticisms have stayed quite similar. We can define this component of ethics as

“What is right or good in the conduct of the advertising function. It is concerned with questions of what ought to be done, not just with what legally must be done”

(Minette E. Drumwright & Patrick E. Murphy, 2009).

Some examples of ethical issues are exploitation, subliminal perception, advertising to children, and deceptive advertising as we are looking at. 

Specifically within Australia, the AANA (Australian Association of National Advertisers) Code of Ethics (February 1st, 2021) needs to be upheld. Under said code, advertising means “any advertising, marketing communication or material which is published or broadcast using any Medium or any activity which is undertaken by, or on behalf of an advertiser or marketer.” 

Along with this, the ACCC (Australian Competition and Consumer Commission) Advertising and Selling Guide is considered to ensure the law is being upheld. “The Australian Consumer Law (ACL) is a national law that aims to protect consumers and ensure fair trading in Australia.” The ACL covers:

  • misleading or deceptive conduct
  • false or misleading claims
  • consumer guarantees
  • unfair contract terms
  • unsolicited consumer agreements.

And also provides a guide to:

  • was/now’ or ‘strike through’ pricing
  • reviews and testimonials
  • online group buying.
  • environmental and organic merits
  • country and place of origin.

In 2019 the ACCC were the applicant in a deceptive marketing claim against the billion dollar company Samsung (Australia) and not upholding these requirements. Proceedings for this case were based on the claim made against the water resistance abilities of certain Galaxy models. The applicant declares that marketing dated back to 2016 showcased advertisements from Samsung “has made and continues to make express or implied representations, or otherwise has engaged and continues to engage in conduct likely or liable to cause consumers to believe, that the Galaxy phones would be suitable for use in, or exposure to, all types of water.” This, based on visual representations, includes bodies of water such as pools and the ocean. The ACCC expressed that Samsung was without reasonable grounds to make such a claim, as the phones were not suitable for use or explode to all types of water. 

The ACCC relies on S4 of the ACL, Schedule 2 to The Competition and Consumer Act 2010, Misleading Representations With Respect To Future Matters, in this case.

Samsung has no grounds, according to this claim, to use visual representatives because they, accusedly, did not undertake or have knowledge of testing the effect of the Galaxy phones when immersed in water. There was no consideration of the possible damages to phone life, which may result in operational issues. There is also the knowledge that on the official Samsung website, the S10 range was actually stated that they were ‘not advised for beach or pool use’. Samsung has apparently “denied manufacturers’ warranty claims made by customers and claims made under the ACL on the basis that the customer’s Galaxy phone has been damaged through use in, or exposure to, liquid.”

Customers experienced harm from these actions as their products were damaged as a result of water exposure. An example of this type of damage is through the charging port of the phone, as when it ‘detects’ water or even moisture in the area, the phone will not charge for ‘safety’ reasons. This comes hand in hand with a pop up displaying a warning sign. Samsung has denied any liability under its warranty obligations.  

Based on all this, the relief grounds sought after are that Samsung produced deceptive, with the possible intention to mislead, advertising marketing their product. 

This is an example why the Code of Ethics and Advertising and Selling Guide, Australian Consumer Law are two important codes of practice that need to be heavily implemented throughout the advertising/marketing aspect of businesses. Providing truthful, tactful and accurate claims for your product is your responsibility, in company with going through multiple rounds of testing and trials to enable this. Otherwise you too could be at fault with the production of faulty, misleading and deceptive products to the public. 

REFERENCES

Act No. 51 of 1974 as amended, Competition and Consumer Amendment Act 2013

Attas, D. (1999), What’s Wrong with “Deceptive” Advertising?. Journal of Business Ethics 21, 49–59

Australian Association of National Advertisers, Code of Ethics, 1997

Australian Competition and Consumer Commission, Advertising and Selling Guide, Competition and Consumer Act 2010

Australian Competition And Consumer Commission v Samsung Electronics, 2019, Australia PTY LTD, Victoria Registry, Federal Court of Australia, Concise Statement, VID721/2019

F Begum, M N Nooh, Advertising Ethics: A Review, The Journal of Commerce, Vol. 4, No. 3, ISSN: 2218-8118, 2220-6043 Hailey College of Commerce, University of the Punjab, PAKISTAN

Minette E. Drumwright & Patrick E. Murphy (2009) The Current State of Advertising Ethics: Industry and Academic Perspectives, Journal of Advertising, 38:1, 83-108 

Samsung, My Device Displays a Water Drop Icon and Will Not Charge, 2021 

Xie, GX., Madrigal, R. & Boush, D.M. Disentangling, (2015), the Effects of Perceived Deception and Anticipated Harm on Consumer Responses to Deceptive Advertising. J Bus Ethics 129, 281–293 

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