What are sections 47-48 - bait advertising and "free" claims?

Advertising goods at a special price without sufficient stock to meet expected demand is prohibited. Similarly false "free" or "gift" claims.

What are sections 54-59 - consumer guarantees?

Goods supplied to consumers come with statutory guarantees that they:

What is aCCC v Volkswagen?

The Federal Court fined Volkswagen $125 million for misleading conduct - the diesel vehicles contained software that detected test conditions and altered emissions performance, while the vehicles were marketed as meeting Australian emissions standards. The judgement was a landmark for misleading-conduct enforcement.

What is aCCC v Trivago?

Trivago was found to have misled consumers about its hotel-price comparison rankings, which favoured advertisers' deals rather than the cheapest deal as suggested in advertising. Penalty of $44.7 million.

What is aCCC v Lorna Jane?

Lorna Jane fined $5 million for misleading health claims about anti-virus activewear during the Covid pandemic. The "anti-virus activewear" claim was unsupported by evidence.

Uber paid $21 million in penalties for misleading conduct on the Australian app - the cancellation-fee warning suggested a fee would apply when in many cases it would not.

What are aCCC v Telstra, Optus, TPG and others on broadband speeds?

Several rounds of enforcement and undertakings around marketed v actual NBN speeds.

What is aCCC v Mazda?

Misleading consumers about their consumer-guarantee rights after vehicle faults. Refund obligations re-stated.

§-Syllabus dot point

NSWBusiness StudiesSyllabus dot point

How are ethical and legal expectations managed in marketing?

Ethical and legal aspects - consumer laws (deceptive and misleading advertising, price discrimination, implied conditions, warranties); ethical aspects of marketing - truth, accuracy, good taste in advertising; sex, religion, gender; products that may damage health

A focused answer to the HSC Business Studies dot point on the ethical and legal aspects of marketing. Australian Consumer Law (misleading conduct, false representations, warranties), the AANA Code of Ethics, and ethical concerns around health, gender and good taste, with worked Australian examples from Uber, Volkswagen, Bunnings and the ACCC.

Generated by Claude Opus 4.811 min answerUpdated 2026-05-27

Reviewed by: AI editorial process; not yet individually human-reviewed

Have a quick question? Jump to the Q&A page

Quick answer

The Australian Consumer Law (ACL, Schedule 2 of the Competition and Consumer Act 2010) is the main legal framework for marketing. Section 18 prohibits misleading or deceptive conduct (judged by likely effect on a reasonable consumer). Sections 29-38 prohibit specific false representations. Consumer guarantees (Sections 54-62) cannot be contracted out. The ACCC enforces, with penalties up to the greater of $50 million, three times the benefit, or 30 percent of turnover. Worked enforcement examples include Volkswagen ($ 125 million for emissions misleading conduct), Trivago ( $44.7 million), and Lorna Jane ($ 5 million for anti-virus claims). Ethical marketing also covers good taste, gender and sex stereotyping (AANA Code), and products that may damage health (tobacco effectively banned from advertising; alcohol and gambling tightened; vaping prescription-only from October 2024).

What this dot point is asking

NESA wants you to know the Australian legal framework for marketing (the Australian Consumer Law in particular), the major ethical issues in marketing (truth, accuracy, taste, gender stereotyping, marketing to children, harmful products), and the regulatory and self-regulatory bodies that police them (ACCC, AANA, ACMA, industry codes). Section II questions are typically 4 to 6 marks; Section IV extended responses often ask you to evaluate a contemporary marketing-ethics or marketing-law issue with a worked example.

The answer

The legal framework

The Australian Consumer Law (ACL)

The Australian Consumer Law is Schedule 2 of the Competition and Consumer Act 2010 (Cth). It applies uniformly across Australia (it is mirrored in state and territory legislation). The ACL is the dominant source of marketing law in Australia and the framework HSC markers expect you to know.

Key provisions for marketing.

Section 18 - misleading or deceptive conduct. "A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive." Conduct is judged by its likely effect on a reasonable consumer in the target market. The test is objective - intention does not matter. Silence (failing to disclose something material) can be misleading.

Sections 29-38 - specific false or misleading representations. These prohibit specific false statements about:

Standard, quality, value, grade, composition.
Country of origin (the "Australian Made" claim is regulated).
Price (was-now pricing must be accurate; bait advertising is prohibited).
Sponsorship, approval, affiliation.
Testimonials.
Place of origin.

Sections 47-48 - bait advertising and "free" claims: Advertising goods at a special price without sufficient stock to meet expected demand is prohibited. Similarly false "free" or "gift" claims.
Sections 50-52 - pyramid selling, referral selling: Prohibited.
Sections 54-59 - consumer guarantees: Goods supplied to consumers come with statutory guarantees that they:

Are of acceptable quality.
Are fit for their disclosed purpose.
Match their description.
Match any sample shown.
Have spare parts and repair facilities available.

These guarantees cannot be contracted out of. They apply in addition to any express manufacturer warranty.

Sections 60-62 - service guarantees. Services come with guarantees of due care and skill, fitness for purpose, and reasonable time for supply.

Implied conditions and warranties

Before the ACL (2011), the Trade Practices Act used "implied conditions". The ACL replaced these with the consumer guarantees above. The 2011 reform was significant in HSC terms - the law now talks about guarantees, not implied conditions. Markers reward knowing the post-2011 framework.

The practical effect for marketing is that any product description (in advertising, on packaging, on a website, in a salesperson's pitch) becomes a guarantee. If the description is wrong, the buyer can demand repair, replacement or refund - regardless of any "no returns" sign.

Price discrimination

The Competition and Consumer Act does not prohibit price discrimination per se in Australia (it was decriminalised in 1995). Differential pricing across customers, channels and regions is generally lawful provided it does not breach the misuse-of-market-power provisions (Section 46) or constitute misleading conduct.

The HSC syllabus mentions price discrimination as a topic to be aware of. The key takeaway is that price discrimination is a competitive practice (different prices for different segments based on willingness to pay) and is legal in Australia unless it has anti-competitive effects.

Warranties

A manufacturer's express warranty is the warranty the manufacturer offers (typically 12 months or 24 months on consumer electronics). This warranty is in addition to the ACL consumer guarantees - it does not replace them.

Marketing that conflates a manufacturer's warranty with the ACL guarantees ("the warranty is only 12 months") may itself be misleading conduct.

The ACCC

The Australian Competition and Consumer Commission is the regulator that investigates and litigates breaches of the ACL. Civil penalties were significantly increased in late 2022 to up to the greater of:

$50 million per contravention.
Three times the benefit derived from the contravention.
30 percent of adjusted turnover during the breach period.

Penalties at this level are designed to be material to even the largest businesses. The ACCC also has compulsory information-gathering powers, enforceable undertakings, and the ability to issue infringement notices.

Major ACL marketing enforcement examples

ACCC v Volkswagen ("Dieselgate", 2019-2020): The Federal Court fined Volkswagen $125 million for misleading conduct - the diesel vehicles contained software that detected test conditions and altered emissions performance, while the vehicles were marketed as meeting Australian emissions standards. The judgement was a landmark for misleading-conduct enforcement.
ACCC v Trivago (2020-2022): Trivago was found to have misled consumers about its hotel-price comparison rankings, which favoured advertisers' deals rather than the cheapest deal as suggested in advertising. Penalty of $44.7 million.
ACCC v Lorna Jane (2021): Lorna Jane fined $5 million for misleading health claims about anti-virus activewear during the Covid pandemic. The "anti-virus activewear" claim was unsupported by evidence.
ACCC v Uber (2022): Uber paid $21 million in penalties for misleading conduct on the Australian app - the cancellation-fee warning suggested a fee would apply when in many cases it would not.
ACCC v Telstra, Optus, TPG and others on broadband speeds: Several rounds of enforcement and undertakings around marketed v actual NBN speeds.
ACCC v Mazda (2019, refresh 2024-2025 across the automotive sector): Misleading consumers about their consumer-guarantee rights after vehicle faults. Refund obligations re-stated.

The self-regulatory framework

The AANA Code of Ethics

The Australian Association of National Advertisers (AANA) Code of Ethics is the self-regulatory code for advertising content. It is administered by the Advertising Standards Bureau (now Ad Standards). Complaints from any member of the public are heard.

The Code requires advertising to:

Not portray people or depict material in a way that discriminates or vilifies.
Not employ sexual appeal in a manner exploitative or degrading.
Not present material contrary to prevailing community standards on health and safety.
Be clearly distinguishable as advertising.

Common complaint categories include gender stereotyping, sexualisation, violence, and unsafe behaviour (driving, kids' behaviour).

Industry-specific codes

ABAC Responsible Alcohol Marketing Code - regulates alcohol advertising.
Australian Food and Grocery Council code - food and beverage marketing to children.
Gambling Industry Code of Practice - now overlaid with the 2024-2026 federal reforms.
Therapeutic Goods Advertising Code - administered by the TGA; restricts health claims.

The ethical dimensions

The syllabus names truth, accuracy, good taste, gender and sex stereotyping, religion, and products that may damage health.

Truth and accuracy

Beyond legal compliance, advertising should be substantively truthful. Technical compliance with the letter of the ACL can still be ethically dubious - hedged or carefully-worded claims that mislead the average reader.

Examples of the ethical line.

Greenwashing. Marketing products as environmentally friendly when the underlying business or supply chain is environmentally damaging. The ACCC has issued specific guidance on greenwashing claims and has pursued cases against businesses making unsupported environmental claims.
Health-washing. Marketing ultra-processed food as "high in fibre" or "low in sugar" while it remains broadly unhealthy.
Influencer marketing. Paid endorsements that are not clearly disclosed.

Good taste

Good taste is the most subjective category. The AANA Code is the main reference point. Common complaints relate to crude humour, sexualisation, violence, fear-based appeals and offensive imagery. Determined complainants can push individual ads to be withdrawn even if they do not formally breach the ACL.

Sex, gender, religion

Gender stereotyping is a focus of community complaints. AANA upheld many complaints about gender stereotyping in recent years (men incompetent at parenting; women anxious about ageing; rigid gender-role depictions). The brands typically withdraw the relevant campaign once complaints are upheld.

Religion-based marketing is sensitive and avoided by most brands. Use of religious imagery for commercial purposes can attract significant backlash.

Sexualised imagery is restricted in placement (no sexualised content on roadside billboards), in target audience (no sexualised content directed at children), and in product category (no sexualised content for products consumed by children).

Products that may damage health

The most regulated category.

Tobacco. Effectively banned from advertising since the 1990s. Plain packaging since 2012. Excise pushes retail prices toward $50 for a pack of 25 in recent years. The plain-packaging law was upheld by the High Court and by the WTO. It has been widely adopted internationally.
Alcohol. Self-regulated under ABAC plus broadcast restrictions. Some calls for stronger statutory regulation.
Gambling. Subject to the 2024-2026 federal reform package responding to the Murphy parliamentary review. Restrictions on broadcast advertising during sport.
High-sugar food and beverages. Health Star Ratings, ongoing debate about advertising to children, with progress in some states on restrictions in schools and government settings.
Vaping. Tightened from 1 October 2024 to prescription-only model. The prior open-market sale of nicotine vapes ended.

A worked Australian example: greenwashing enforcement (2023-2025)

The ACCC's enforcement of greenwashing claims has intensified since 2022. Public guidance was issued; "principles for trustworthy environmental claims" published. Several businesses across multiple sectors received warnings, undertakings or pursued litigation for unsupported environmental marketing - "carbon neutral" claims without verified offsets, "recyclable" claims without practical recycling pathways, "sustainable" labels not backed by independent certification.

The lesson for marketers is that environmental claims must be supported by evidence and clearly explained. The ACCC's view is that the average consumer cannot easily verify environmental claims and so is particularly susceptible to misleading representations in this category.

Worked example

"Evaluate the effectiveness of the Australian Consumer Law in regulating misleading marketing. (8 marks)"

Plan. Cover the law, the penalty regime, examples of effective enforcement, the limitations, and an evaluation.

Sample response (extract).

"The Australian Consumer Law (ACL), Schedule 2 of the Competition and Consumer Act 2010, prohibits misleading or deceptive conduct in trade or commerce (Section 18) and a series of specific false representations (Sections 29-38). It is the primary legal protection against misleading marketing in Australia.

The ACCC enforces the ACL. Since 2022, civil penalties can reach the greater of $50 million per contravention, three times the benefit derived, or 30 percent of adjusted turnover. These penalties are material to even the largest businesses.

Effective enforcement examples include the Volkswagen Dieselgate case ( $125 million penalty for misleading emissions claims), the Trivago case ($ 44.7 million for misleading hotel-price rankings), the Lorna Jane anti-virus activewear case ($5 million for unsupported health claims) and the recent greenwashing enforcement programme.

The ACL is effective in deterring large-scale, easily-evidenced misleading conduct. Public penalties create reputational damage in addition to financial penalty, and businesses now budget for ACL compliance the way they budget for tax compliance.

Limitations are also real. Investigation is slow (Volkswagen took several years from public scandal to penalty). Small breaches by small operators often go unaddressed. Greenwashing and influencer-marketing disclosure remain underenforced. Some practices (price discrimination, certain forms of dark-pattern UX) sit outside the ACL.

Evaluation: the ACL is highly effective as a deterrent and as a remedy in high-profile cases. The intensification of penalties in 2022 and the focused programmes on greenwashing and consumer guarantees signal a regulator with growing capability. The remaining gap is the enforcement bandwidth to cover the full marketing landscape; self-regulation (AANA, industry codes) fills part of the gap. On balance, Australia's consumer-protection framework is among the strongest in the world."

Common traps

Citing "Trade Practices Act" instead of the ACL: The TPA was replaced in 2011. The current law is the Competition and Consumer Act 2010, with the ACL as Schedule 2. Markers will deduct for outdated citation.
Saying intention matters: Section 18 is judged by likely effect on a reasonable consumer, not seller intention. This is core knowledge.
Confusing manufacturer's warranty with ACL guarantees: They are different. The ACL guarantees cannot be contracted out. The manufacturer's warranty is in addition.
Treating "self-regulation" as fully effective: Self-regulation works for category reputation; statutory regulation is needed for externalities and harm.
Ignoring the penalty regime: Post-2022 penalties are very large. Reference them explicitly.
Using only historical examples: The Volkswagen case is good. The Trivago, Lorna Jane and greenwashing cases are more recent and demonstrate currency.

Exam-style practice questions

Practice questions written in the style of NESA exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.

2023 HSC-style6 marksExplain how the Australian Consumer Law regulates misleading and deceptive conduct in advertising. Use a recent Australian example.

Show worked answer →

A 6-mark answer needs the relevant ACL section, the test, the enforcement framework, and a worked example.

The law: Section 18 of the Australian Consumer Law (in Schedule 2 of the Competition and Consumer Act 2010) prohibits any person, in trade or commerce, from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive. Sections 29 to 38 prohibit specific false or misleading representations (about price, country of origin, sponsorship, testimonials, performance characteristics).
The test: Conduct is judged by its likely effect on a reasonable consumer in the target market - not by the seller's intention. A statement can be misleading even if technically true if it creates a false overall impression. Silence (failing to disclose something important) can be misleading.
Enforcement: The Australian Competition and Consumer Commission (ACCC) investigates and litigates. Penalties were materially increased in 2022 to up to the greater of $50 million per contravention, three times the benefit derived, or 30 percent of adjusted turnover during the period of the breach. Private parties can also sue for damages and injunctions.
Worked example: ACCC v Volkswagen (Dieselgate, 2019-2020): The Federal Court fined Volkswagen $125 million in 2019 (one of the largest ACL penalties at the time, since exceeded) for misleading conduct in claiming its diesel vehicles met Australian emissions standards when in fact they contained "defeat device" software that detected test conditions and altered emissions performance. The court found the conduct misleading even though the vehicles were technically capable of compliant emissions in test mode.

Markers reward (1) the specific ACL sections (Section 18 and Sections 29-38), (2) the reasonable-consumer test, (3) the ACCC's enforcement role and penalty regime, (4) a real worked example.

2021 HSC-style5 marksDiscuss the ethical issues that arise in marketing products that may damage health.

Show worked answer →

A 5-mark discussion needs the ethical issues, the regulatory response, and the limits of self-regulation.

The ethical issues. Products that may damage health (tobacco, alcohol, gambling, high-sugar foods, vaping) present a tension between commercial freedom (legal product, willing buyer) and consumer protection (health harms, externalities on the health system and on children). Specific concerns: marketing to children and vulnerable groups, glamorising risky consumption, downplaying health risks, targeting harmful products at lower socio-economic groups.

Regulatory response in Australia.

Tobacco. Banned from advertising since the 1990s. Plain packaging since 2012. Excise tax pushes a 25-pack toward $50 in recent years.
Alcohol. Self-regulated under the ABAC Responsible Alcohol Marketing Code and AANA Code. Some broadcast-timing restrictions.
Gambling. Broadcast restrictions around sporting events; ongoing 2024-2026 reforms (Murphy review).
High-sugar food. Health Star Ratings (voluntary), ACMA and state restrictions on marketing to children.
Vaping. Tightened prescription-only model from 1 October 2024.

Worked example: gambling advertising 2024-2026. Federal reforms in response to the Murphy parliamentary review have progressed bans on commercials during live sport, after sustained campaigning by The Alliance for Gambling Reform. The ethical case rests on harm to children and problem gamblers; the commercial case against rests on advertising revenue (around $100 million-plus to broadcasters).

Limits of self-regulation. Self-regulation works when industry has incentive to maintain reputation. It tends to fail where products cause externalities (tobacco, gambling, ultra-processed food) and statutory regulation is needed.

Markers reward (1) ethical issues named, (2) regulatory response by category, (3) limits of self-regulation, (4) a current example.