Small businesses urged to be aware of consumer law around digital advertising

Inside Small Business

12th Jul 2022

A rise in the number of misleading and deceptive conduct cases related to digital marketing has prompted a specialist law firm to stress that businesses need take precautionary measures when it comes to advertising online.

Gold Coast-based Twomey Dispute Lawyers are warning businesses that they could face significant repercussions if their online advertising does not conform to Australian consumer law.

Twomey Dispute Lawyers Associate Tegan Childs says while businesses can pay for the AdWords of another company, one company mentioning another business or that business’s trademark in an advertisement can be deemed to be misleading and deceptive conduct.

“The easiest way to understand this is when one company creates, for example, a Google advert and uses another company’s name or trademark written throughout the meta tags, slogan, link, headline or advert text,” Childs said.

“This can deceive and create confusion among consumers who click on that advert and might think there’s a collaboration between the two companies or that they are connected in some way,” Childs added. “If you are doing paid adverts, it’s important not to do anything that tries to pass off or confuse people that your product or business might be similar to that of a trade rival.”

Twomey Dispute Lawyersare keen to highlight the fact that most cases of deceptive and misleading conduct in the digital space involve small businesses or trade rivals.

“While it’s okay to look at competitors to help influence your marketing goals, using another business’s trademark or branding in your campaigns is not,” Childs said. “Because, if any of your digital marketing activities mislead people into thinking you’re similar or connected, you might open yourself up to numerous liabilities with serious repercussions. You could be infringing on trademarks or copyright, as well as engaging in misleading and deceptive conduct.

“There are companies who have spent a lot of time and money in creating a brand, reputation and a certain following, and if they see someone try and sponge off that, chances are they are going to seek legal help,” Childs added.

With online advertising currently accounting for 64 per cent of the market and more and more businesses adding a digital advertising to their overall marketing budgets, the law firm are warning that the marketing industry needs to ensure it fully understands Australian consumer law.

“If you’re representing a company and curating their online paid content, the same rules apply, don’t use a competitor’s branding within those adverts,” Childs said. “It’s important that businesses who work alongside an external marketing company manage their digital adverts, to ensure they have some intermediary ability to view any and all adverts before they go live.

“In most cases, businesses aren’t aware that their goodwill is being used by another company until they Google themselves and see their name, trademark or slogan in a paid advert,” Childs added. “If you find that your rights have been breached and another company is using your branding in their digital advertising, there are a number of remedies available to you, but in the first instance, you need to seek legal help.”

The story is originally published on Inside Small Business.