Advertising practices have long since evolved from that of traditional print media, instead occurring primarily online, through areas such as email, social media, apps and online shopping sites to name a few. Due to this it is essential for Communications and Media students, especially those focused on digital media or marketing, to be aware of the laws that govern the content they produce.
Australian Consumer Law (ACL) protects citizens from any unsavoury acts businesses may partake in to manipulate customers, ensuring that fair trading occurs throughout Australia.
Critical are those laws revolving around deceptive and misleading advertising, as there are a number of cases – such as Optus V Telstra (2018) – where something as small as a single word has led to arduous court cases and a number of restrictions, thus demonstrating the importance of fully understanding the implications of these laws.
Deceptive and misleading advertising: What is it and how to spot it?
ACCC defines misleading and deceptive conduct as actions that either “misleads or deceives or is likely to mislead or deceive consumers or other businesses.” These laws apply even if one does not intend to mislead or deceive, meaning that in this case intent does not matter.
This is something important to consider, as it means that a simple mistake or misunderstanding could lead to a serious breach of these laws, meaning that it is important to know ones audience, as it is their perception influences how the message is seen and understood in wider society.
Section 29 of the Australian Competition and Consumer Act (2010) is critical for marketing students to understand, as it covers false or misleading representations about goods or services – essentially it outlines what business cannot do when advertising their products.
There are a number of exclusions that can be taken into consideration when considering if a case has broken the law. Primarily; qualifications and exclusionary clauses as well as offers with fine print disclaimers.
The consideration of clauses as an exemption hinges on the overall impression created by an audience. It is essential for an advertiser to direct the consumers attention to the key terms and conditions of a product or service, so they can make an informed decision to purchase it or not.
Optus v Telstra (2018)
Optus Mobile Pty Ltd v Telstra Corporation Limited (2018) was a Federal court case, wherein Optus alleged that Telstra’s advert’s including the text “One word from Australia’s best mobile network. Unlimited.” were misleading. They claimed that the adverts lead consumers to believe that Telstra offers a product that they impose no limits on.
While Telstra has a number of ‘unlimited deals’ the offer most associated with this campaign was their “Endless data BYO plan.” A new plan, offering 40GB of data at full 4G speeds, with further data being ‘limited’ to 1.5 mps.
Prior to the commencement of court proceedings commenced, solicitors spoke to a number of Telstra sales assistants from various stores about the plan. One such employee said that after the initial 40GB are used, the data accessibility is “throttled down” claiming that “you would be miserable. 1.5 mps is not suitable for [watching Netflix].” Instead it would be suitable for “stuff line eBooks or similar applications.”
This is supported by data provided by the 2019 Australian Mobile Network Experience Report outlined that Telstra’s average 4G download speed was 49.1mps, whereas the 3G download speed was 5.8mps. In the Endless data BYO plan, the speed offered after the 4G limit has been reached was a maximum of 1.5mps, far lower than the speeds currently offered by the 4G network, and even significantly slower than older 3G network speeds.
In defence to this, Jeremy Nicholas, Telstra’s Executive Director of Brand Consumer and Business Marketing stated that there were many existing products and services offered by Telstra on and unlimited basis, such as their local and national voice calls to Australian numbers, or their international roaming. In this particular advertisement, the usage of the word ‘unlimited’ was intended to make the viewer curious about its meaning, conveying a sense of “wonderment… any nothing more.”
However, in doing so, Telstra ignored a key part of marketing, context. They did not acknowledge that the word ‘unlimited’ was made in the context of Telstra identifying it as, “Australia’s best mobile network”, or that many of the online adverts contained links sending consumers directly to their new Endless data BYO plan.
While the case itself hasn’t had a major impact on the media industry as a whole, it did have a considerable impact on Telstra. Not only did the Court order the business to cover the costs associated with the case, but Telstra was “restrained for a period of three years from, publishing, broadcasting, communicating and otherwise distributing” any advertising containing the word ‘unlimited’. This may seem like a minor penalty, but it meant that part of Telstra’s advertising had to be transformed completely, changing their branding to create “peace of mind” packages with vastly different connotations and methods of advertising.
Tying it all together
The Telstra V Optus [2018] case is a key example of how a small oversight in marketing can lead to serious consequences. Due to the fact that Telstra overlooked the context of the advertisement as a whole, as well as the implications of the word ‘unlimited’ they had to go through a court case and completely change a whole facet of their advertising. It is important for marketing students in particular to acknowledge this and know that it is critical to understand the audience one is marketing to. If, perchance, another word – with slightly different connotations – was used in this instance, the whole issue may have been easily avoided.
The case also outlines a key ethical issue with deceptive and misleading advertising, its manipulative properties. Through the careful omission of certain facts or clauses, consumers are led to believe a product – in this case Telstra’s data plan – provides certain benefits, when in all actuality it does not. Although consumers have the opportunity to look deeper into the deal themselves, they should not have to do so. Limitations on products or services need to be clearly advertised along with the item itself so as to not mislead the customer and lead to potential court cases down the line.
Further, it is important to understand the powers different governing bodies hold over a company. Not only was Telstra subject to the laws outlined in the Australian Competition and Consumer Act (2010), as well as the ACL, they were bound by the Telecommunications Consumer Protections Code (TCPC), as they agreed to uphold the guidelines set out within it. Section 4.2.1 of the TCPC specifically covers the word ‘unlimited’. Since they acknowledged this code, they were subject to the rules it outlined, meaning their usage of the word unlimited in such a context was put under more scrutiny.
In conclusion it can be noted that it is critical for marketing students to understand the laws their future careers will be bound by, especially those revolving around deceptive and misleading advertising. This is exemplified by the Optus V Telstra [2018] case, as due to Telstra’s negligence in considering the full implications of their decision to us the word ‘unlimited’ to marker their newest plan, they had a number of penalties imposed upon them. This case demonstrates how important a single phrase, or even a word, can be when it comes to advertising – something students need to fully acknowledge and understand.
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