“GREEN” CLAIMS continue to infiltrate mainstream marketing campaigns across virtually all industries, but the ACCC may soon have new weapons in its arsenal to enable it to test the validity of these claims.
In its recently released Consumer Policy Framework, the Productivity Commission recommended that ACCC be given the power to issue “substantiation notices” requiring suppliers to “reasonably substantiate the basis on which claims or recommendations are made”.
According to Mallesons Stephen Jaques partner Amanda Bodger, the ACCC has been calling for such powers for several years now, and the recommendation has now also been endorsed by the Ministerial Council of Consumer Affairs.
Bodger said that if the recommendation was given the go-ahead, the ACCC would have “significantly broader” powers to investigate marketing claims relating to the environmental performance of a product or business.
The ACCC currently does have power under section 155 of the Trade Practices Act 1974 (TPA) to issue a notice requiring a business to provide information regarding a marketing claim, Bodger explained. However, it can only do so if it “has reason to believe” that the claim may have contravened the TPA.
“Often when claims have been made by companies, there’s no real concern that there has been a breach of the act, [the ACCC] just doesn’t know whether [the claim is] true or not,” she said. “So this substantiation power would go beyond the commission’s current rights [to situations] where the commission has no idea whether a claim is right or wrong.”
A substantiation power would also make it easier for the ACCC to prosecute businesses that it determines — based on the information obtained from the substantiation notice — have breached the TPA.
“If the substantiation can’t be given, or it’s given but it doesn’t really substantiate the claim, then the commission’s case is much easier to prove because they’ll be given that evidence before hand … they’ll have all the information given to them under the substantiation power which makes their case easier,” Bodger said.
Bodger foresees that the proposed new changes could significantly affect the nature of advertising, as businesses would be required to keep a detailed file on hand to back up all marketing claims.
The issue of climate change is well and truly making its mark across the entire spectrum of industry, and with the Carbon Pollution Reduction Scheme just two years away, its influence can only grow.
On 12 September Lawyers Weekly will present an interactive forum on the Carbon Pollution Reduction Scheme at the Tattersall’s Club in Sydney.
This will be first in a series of forums looking at emerging issues affecting the legal profession, and there is arguably no issue that will have as extensive, far-reaching implications as climate change.
Lawyers Weekly has gathered a panel of experts in the field, representing government, law, academia, the non-profit sector and the technology industry, who will share their insights in a moderated “in the round” discussion.
The event will include a networking lunch. To register for the forum, for which you can gain CLE points, go to www.lawyersweekly.com.au/register.