ACL misleading or deceptive conduct: sections 18 and 29

Section 18 — the broad prohibition

Section 18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010) establishes a broad prohibition against misleading or deceptive conduct. This prohibition applies to any person engaging in trade or commerce. Conduct that is misleading or deceptive, or likely to mislead or deceive, is prohibited.

The operation of this section is based on strict liability. This means that a person can breach this provision even if they did not intend to mislead or deceive anyone. Careless statements or even well-meaning actions can result in a contravention.

The scope of conduct covered is wide, encompassing representations, omissions, conduct (including silence in certain situations), and dealings with both consumers and other businesses. While section 18 contraventions do not attract civil pecuniary penalties under the ACL, they can give rise to remedies such as damages, injunctions, declarations, and corrective advertising orders.

Section 29 — false or misleading representations

Section 29 addresses particular instances of misleading or deceptive conduct. It prohibits false or misleading representations relating to the supply, potential supply, or promotion of goods and services. These representations cover a range of topics, including a product’s standard, quality, value, grade, composition, history, sponsorship, approval, place of origin, the necessity of a service, price comparisons, and whether consumer guarantees are excluded. penalty estimator

A key distinction from section 18 is the type of consequences for breaches. Contraventions of section 29 result in civil pecuniary penalties. For bodies corporate, the maximum penalty is the higher of a specified penalty-unit amount, three times the benefit obtained from the conduct, or 10% of the company’s annual turnover during the period the breach occurred.

It is important to recognise that certain equivalent representations are also subject to criminal offences, as outlined in Part 4-1 of the Australian Consumer Law.

Who can sue and remedies

Parties who have suffered loss or damage as a result of misleading or deceptive conduct can pursue legal action. The Australian Competition and Consumer Commission (ACCC) is the main body responsible for enforcement, although state and territory consumer-protection regulators also have jurisdiction.

Section 18 of the Australian Consumer Law is frequently used in commercial disputes, allowing affected parties to seek remedies through private lawsuits. These remedies can include compensation for losses incurred, such as loss of bargain, reliance loss, and any consequential loss that resulted from the misleading conduct.

The available remedies are not limited to monetary compensation; injunctions are also available to prevent further misleading conduct.

Practical compliance

To ensure compliance with sections 18 and 29 of the Australian Consumer Law, businesses must substantiate all commercial claims before publication. This includes, but is not limited to, pricing, performance, environmental, comparative, and country-of-origin claims. Failure to do so is a common reason for audit failures.

Compliance requires a holistic approach. Businesses should review not only headline claims, but also the accompanying small print and the overall impression created by their marketing materials. Courts assess conduct as a whole, and disclaimers do not automatically negate misleading or deceptive representations.

Proactive measures are essential. Businesses should train marketing, sales, and customer-service teams to recognise potentially risky representations. Maintaining records of the evidence supporting each substantive claim is also a key step in demonstrating due diligence.