Marketing, advertising and marketing innovations: HSC Legal Studies

What this dot point is asking

This page covers two linked parts of the Consumers option. In the nature of consumer law, the syllabus lists regulation of marketing and advertising: statutory protection, non-statutory controls on advertising, and asks you to evaluate the effectiveness of the regulation of marketing, advertising and product certification in achieving consumer protection. In contemporary issues, marketing innovations is one of the four issues that must be studied: you must identify and investigate the issue and evaluate the effectiveness of legal and non-legal responses.

Treat them together: the rules on marketing and advertising are the legal responses, and marketing innovations are the new techniques that test them. In the 2023 HSC (Question 26(a)), NESA's feedback praised responses that identified marketing innovations such as spam, scams and advertising, and warned against drifting into non-legal responses when the question asks about legal ones. Scams and data-driven practices are covered in more depth on technology.

The answer

Why marketing needs regulating

Marketing shapes what consumers know about a product before they buy it. Because the business controls the message, it has every incentive to present a product favourably, and the consumer usually cannot check claims about price, quality, origin or environmental benefits. Modern marketing adds new pressures: advertising that is personalised using data, blurred lines between content and advertising (influencers), prices that change constantly, and online design that steers choices.

Statutory protection

The general prohibition. ACL s 18 provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive. It is judged by the overall impression on the ordinary or reasonable members of the target audience, and intention is irrelevant: honest businesses can breach it. Section 18 is not a civil penalty provision, but a court can grant injunctions, damages and corrective orders.

Specific prohibitions with penalties.

• s 29 prohibits false or misleading representations about goods and services: that they are of a particular standard, quality or grade; that they have sponsorship or approval; false or misleading testimonials; representations about price, place of origin, or consumer guarantee rights.
• s 33 and s 34 prohibit conduct liable to mislead the public about the nature, manufacturing process, characteristics or suitability of goods and services.
• s 35 bait advertising: advertising at a specified price without reasonable grounds to believe the business can supply at that price for a reasonable period and in reasonable quantities.
• s 47 and s 48 pricing: a business displaying more than one price must sell at the lowest (s 47), and when it states part of a price it must also prominently state the total minimum price, including unavoidable fees (s 48, the single price rule).
• Unsolicited consumer agreements (door-to-door and telemarketing sales) must meet disclosure rules, permitted calling hours and a 10 business day cooling-off period.
• Spam and telemarketing. The Spam Act 2003 (Cth) requires consent, identification and an unsubscribe facility for commercial electronic messages, and the Do Not Call Register Act 2006 (Cth) lets consumers opt out of telemarketing; both are enforced by ACMA.

Penalties. The maximum penalty for a corporation for a breach of the penalty provisions rose to $50 million (or three times the benefit, or 30 per cent of adjusted turnover) in November 2022, and was doubled to $100 million from 28 March 2026. The ACCC can also issue infringement notices, seek corrective advertising and accept enforceable undertakings.

Non-statutory controls on advertising

Advertising is also self-regulated by industry.

• The Australian Association of National Advertisers (AANA) writes codes, including the Code of Ethics (advertising must be clearly distinguishable as advertising, must not be discriminatory or unsafe, and must meet community standards), the Environmental Claims Code, and a code for advertising to children.
• Ad Standards administers complaints. Its Community Panel decides whether an advertisement breaches the codes on issues such as decency, violence, discrimination and health and safety.
• Industry codes also exist for specific products, such as the Alcohol Beverages Advertising Code (ABAC) and codes on therapeutic goods and food advertising to children, and influencer marketing codes have been developed by industry.

Evaluation of self-regulation. Complaints are free, quick and handled by people who know the industry, and most advertisers comply with adverse decisions to protect their reputation. But decisions are not legally enforceable, there are no penalties, the codes are written by industry, and the process deals mostly with taste and decency rather than misleading claims, which are left to the ACL.

Marketing innovations: identifying the issue

Marketing innovations are new techniques that businesses use to attract and influence consumers. The main ones in 2026 are:

1. Influencer and social media marketing, where the line between genuine opinion and paid promotion is blurred.
2. Environmental and ethical claims (greenwashing), where consumers pay more for "sustainable" products they cannot verify.
3. Discount and pricing tactics, including "was/now" discounts, loyalty pricing and changing package sizes ("shrinkflation").
4. Drip pricing and hidden fees, where the full price is revealed only at the end of an online purchase.
5. Subscriptions and dark patterns, where signing up is easy and cancelling is hard.
6. Data-driven and personalised marketing, including targeted advertising and dynamic pricing.

Marketing innovations: the legal responses in action

Ghost flights (Qantas)

Between May 2021 and July 2022, Qantas kept selling tickets for more than 8,000 flights it had already decided to cancel, and took on average about 11 days, and in some cases up to 67 days, to tell ticketholders. In October 2024 the Federal Court ordered Qantas to pay $100 million in penalties, and Qantas paid about $20 million to affected passengers ($225 for domestic and trans-Tasman bookings, $450 for international). It shows the ACL applying to online booking systems and the deterrent effect of penalties at the 2022 level.

Illusory discounts (Coles and Woolworths)

In September 2024 the ACCC sued both supermarkets, alleging that they raised the prices of hundreds of products for short periods and then advertised them as discounted under "Down Down" (Coles) and "Prices Dropped" (Woolworths) promotions at prices higher than or equal to their earlier regular price. On 14 May 2026 Justice O'Bryan found that Coles misled shoppers in 13 of the 14 "Down Down" price tickets examined, because the discounts they represented were not genuine. Penalties were still to be decided. Judgment in the Woolworths case was reserved. Check whether the Coles penalty and the Woolworths judgment have since been handed down before the exam. The cases followed the ACCC's supermarkets inquiry (final report released 21 March 2025), which recommended clearer rules for discount promotions and notifications when package sizes shrink.

Greenwashing

An ACCC internet sweep in 2022 found that many businesses made concerning environmental claims, and the ACCC issued guidance on environmental claims in 2023. The Federal Court ordered Clorox Australia to pay $8.25 million (2025) for falsely claiming that GLAD bags were made of 50 per cent recycled "ocean plastic"; more than 2.2 million products carried the claim. ASIC has applied the same principles to investments: Mercer ($11.3 million, 2024) and Vanguard ($12.9 million, 2024) were penalised for misleading claims about ethical or ESG screens.

Influencers

In December 2023 the ACCC reported that 81 per cent of the 118 social media influencers it reviewed made posts raising concerns under the ACL, most commonly failing to disclose brand relationships clearly (using vague tags such as "collab" or "ambassador"). The ACCC issued guidance and warned that influencers and brands can be liable for misleading testimonials.

Subscriptions and hidden options

In October 2025 the ACCC sued Microsoft, alleging it told about 2.7 million Microsoft 365 subscribers they had to accept a price rise that came with its Copilot AI assistant or cancel, without disclosing a cheaper "Classic" plan; Microsoft apologised and offered refunds. The case shows how the misleading conduct rules are used against subscription practices; it is a proceeding seeking penalties, so check its outcome before citing it as decided.

Drip pricing and dark patterns: a gap being closed

Section 48 requires a total price to be shown, but many online practices are manipulative without being false: hidden cancel buttons, pre-ticked extras, fake countdown timers, fees added at checkout. In July 2026 Parliament passed the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026. From 1 July 2027 it will prohibit practices that manipulate consumers or unreasonably distort their decision-making and cause detriment, require transaction-based fees to be shown with the base price, and require an easy way to cancel subscriptions, with penalties up to $100 million.

Non-legal responses to marketing innovations

• Ad Standards hears complaints about influencer posts and environmental claims under the AANA codes.
• CHOICE exposes misleading marketing, for example through its Shonky Awards, and campaigned for the unfair trading practices law and for supermarket pricing reform.
• The media reported on supermarket pricing and ghost flights, increasing pressure on regulators; social media lets consumers call out misleading marketing quickly.
• Consumer awareness of how influencers are paid, how "was/now" prices work and how to compare unit prices helps consumers protect themselves.

Evaluating the regulation of marketing and advertising

Judgement. The regulation of marketing and advertising protects consumers to a large extent against false claims. The broad prohibition on misleading conduct adapts to new techniques without new legislation, and the Qantas, Clorox and Coles cases show courts applying it to ghost flights, greenwashing and illusory discounts, with penalties that now matter even to the largest companies. It protects consumers to a lesser extent against manipulation: techniques that exploit behaviour rather than make false statements, such as drip pricing, dark patterns and subscription traps, fall into a gap that the unfair trading practices law will only close from 1 July 2027, and self-regulation through Ad Standards lacks teeth. As with other consumer law, enforcement is slow and reactive, but the direction of reform is towards stronger protection.

In one sentence

The Australian Consumer Law's broad ban on misleading conduct, backed by penalties of up to $100 million, has allowed courts to respond to ghost flights, greenwashing and illusory discounts, but self-regulation lacks teeth and manipulative techniques such as drip pricing and subscription traps will only be banned from 1 July 2027.

Try this

Q1. Identify TWO marketing innovations that affect consumers. (2 marks)

• What the marker wants. Two clear innovations, such as influencer marketing and drip pricing.

Q2. Explain the role of Ad Standards in regulating advertising. (4 marks)

• What the marker wants. Self-regulation under the AANA codes, the Community Panel, what it deals with, and the lack of legal enforceability.

Q3. Evaluate the effectiveness of the law in protecting consumers from misleading pricing practices. (8 marks)

• What the marker wants. s 29 and s 48, the Coles and Woolworths cases and their status, the supermarkets inquiry, the unfair trading practices law, and a judgement.