Is ACCC keeping its powder dry or going soft?
Sydney Morning Herald
Thursday July 30, 2009
Is the Australian Competition and Consumer Commission going soft on advertisers? Or is it just being expedient, avoiding lengthy court cases in favour of a quick and speedy resolution in the form of a court-enforceable undertaking?Ever since the high-profile case against Coca-Cola in April there have been murmurings within the legal profession and the advertising industry that the competition regulator has been shying away from taking rogue advertisers to court.In Coca-Cola's case those ludicrous ads featuring the actress Kerry Armstrong busting the myths that Coke rots your teeth, makes you fat or is packed with caffeine it didn't make it to court. Instead the company was ordered to issue a mea culpa and acknowledge the fact that the ads "had the potential to mislead consumers". The prevailing view among marketers and the legal profession was that Coke got off lightly.A cursory glance at big-name or high-profile cases over the past 12 months shows that the ACCC has taken court action against just three companies for misleading and deceptive conduct: Prouds Jewellers, Channel Seven and the catalogue company Harris Scarfe. Another four cases against Nudie, Saab, Dairy Farmers and an art gallery, Doongal, in Cairns - went to court and were uncontested.But the ACCC appears to have been most active in negotiating agreements with advertisers. In that period Video Ezy, the vacuum cleaner vendor Godfreys, Hoover, Goodyear, V8 Supercars, Black & Decker and, of course, Coca-Cola have all negotiated undertakings that are bound by the court.Sue Gilchrist, an intellectual property partner at the lawyers Freehills, says a "trend" for the commission to opt for these agreements over legal action is emerging."Even though this could be seen as sending the wrong message to advertisers, I would urge them [advertisers] not to be lulled into a false sense of security," says Gilchrist.While there have been some recent high-profile advertising matters which some might think could have called for court action, this is not an indication that the ACCC will not pursue the court option in different circumstances.The ACCC chairman, Graeme Samuel, says it is adopting a "highly honed strategic approach" that is about getting the best possible result for the consumer in the shortest time. But going soft? Never, says Samuel, who adds that he always holds court action in reserve much like a "gun in a holster".If an advertiser (or miscreant, as he says) demonstrates any of these a blatant disregard for the law, a lack of co-operation, a culture of non-compliance and considerable consumer detriment then Samuel will go after them."I think if anything advertisers recognise that the enforceable process is probably quicker, sharper and more effective in their outcomes than in anything that they faced in the past," says Samuel, who denies a "change in policy".Samuel says taking Coke to court would not have necessarily got the same outcome: "Whether we would have got out of the court a corrective advertisement is highly questionable. As it was they went through a pretty painful process."
Β© 2009 Sydney Morning Herald