Misleading Advertising: Slendertone Case Study

This assignment examines a case study involving the advertisement of 'Slendertone', a product claiming to tone muscles without exercise. It analyzes the advertisement in light of Australian Consumer Law (ACL), specifically sections 18 and 29, which prohibit misleading or deceptive conduct and false representations in advertising. The analysis concludes that the advertisement contravenes these sections, potentially leading to legal action by the Australian Competition and Consumer Commission (ACCC) against the company. The assignment also explores potential remedies available under the ACL, such as damages claims, injunctions, and monetary penalties.

Running head: FUNDAMENTALS OF LAW
Fundamentals of Law
Name of the Student
Name of the University
Author Note

1FUNDAMENTALS OF LAW
Most of the Australian Businesses uses television, radio, print media or internet as the
means to advertise their products and services (Ahmad 2016). The Australian Consumer Law
(ACL) is a part of the Competition and Consumer Act 2010 (The Act), aims at ensuring fair-
trading and safeguarding the rights of the consumers.
Issue
Whether misleading or deceptive claims can be made with respect to the advertisement of the
product ‘Slendertone’.
Rule
The Australian Consumer law (ACL) is applicable to persons which also includes business
forms and corporations. Some of the provisions of the ACL is also applicable to ‘consumers’ and
some other provisions apply generally in trade and commerce (Pearson 2017). In respect to the
issue arising in the given scenario, the ACL guarantees protection against unacceptable conduct
such as deceptive or misleading contract under section 18 of the ACL and other specific forms of
conduct such as false representations under section 29 of the ACL. As the issue identified in the
scenario is related to advertising and selling, there are two essential rules pertaining to
advertisement and selling under the Australian consumer law, which are as follows:
 A person is prohibited from engaging in a conduct that is likely to mislead or deceive;
 A person is prohibited from making any misleading or false statements or claims;
However, these two rules often overlap with each other and a particular statement may be in
contravention of both these rules. Section 18 of the ACL prevents a person from engaging into
conduct that is misleading or deceptive or any conduct that creates false impression regarding the

2FUNDAMENTALS OF LAW
value, price or quality of services as was held in Australian Competition and Consumer
Commission v Telstra (2007). In order to establish that certain conduct was misleading or
deceptive, the plaintiff must prove that the conduct leads the person into error and he relied on
the misleading or deceptive conduct (Howells and Weatherill 2017). Such conduct has resulted
in loss pr harm suffered by the plaintiff. Such conduct may include creating false impression
using the words like free, puffery, silence instead of disclosing relevant information. However,
the conduct does not have to be deliberate as was held in Google Inc v Australian Competition
and Consumer Commission [2013] 249 CLR 435. The word ‘likely to be deceiving or
misleading’ stipulated under section 18 of ACL implies that the plaintiff need not prove whether
the conduct had deceived or misled when the conduct is already considered as misleading or
deceptive.
In addition to the fact that a person is prohibited from engaging into misleading or
deceptive conduct, it is unlawful for any business to make any false or misleading claims with
respect to their concerned products or goods. A misrepresentation is a statement or claim, which
is false or misleading that is made by one party to another party. These false or misleading
claims are made through advertisements through TV, Radio, internet or print media that is
prohibited under section 29 of the ACL in relation to composition, value or grade or quality of
the goods or services as was ruled in Given v C Holland (Holdings) Pty Ltd [1977].
Any person aggrieved of any misleading conduct under section 18 of the ACL, the person
shall be entitled to claim compensation under section 236 and in case any advertisement is
misleading or deceptive, the aggrieved party shall be entitled to obtain an injunction order under
sections 232-235 of the ACL. The other form of remedies that are available include modification
or rescission of contract, infringement notices public warning notices, non-party consumer

3FUNDAMENTALS OF LAW
redress and disqualification notices under section 237 and 243 Australian Consumer Law. The
ACCC exercises a range of compliance tools to prevent contravention of the Act including
consumer education and work with agencies (Hunt 2015). The Act also provides the ACCC with
a range of enforcement remedies such as court enforceable undertakings and court-based
outcomes under section 87B of the Act.
Application
On the facts here, the advertisement of ‘Slendertone’ claims to tone any part of the body
and provide benefit of workout without working out. In practice, the product does not provide
any of the benefits it promises to provide in the advertisement. The advertisement is in
contravention of section 18 and section 29(1) of the Australian Consumer law. The
advertisement involves conduct that is likely to mislead or deceive its targeted audience, which is
prohibited by section 18 of the Act. This is because, the advertiser has created an impression that
would lead several consumers into error who would relies on such conduct (Hunt 2015). It is a
well-known fact that there are other consumers other than the targeted audience who may easily
rely on the false impression and be deceived or misled as the overall impression created by the
conduct is false. Under such circumstances, the aggrieved person may claim damages under
section 236 or obtain injunction or compensatory order under section 237 of the Act.
The advertisement is also in contravention of section 29(1) of the ACL as it made false or
misleading claims with respect to the product ‘Slendertone’ and its features. The company had
used comparative advertising technique to promote the product and any reasonable person would
rely on the false representation created by the advertisement and would be misled or deceived.

4FUNDAMENTALS OF LAW
Conclusion
It can be concluded that the consumers under the Australian Consumer Law shall be
entitled to damages or compensatory orders for the damage suffered or the loss caused by the
product. Although the ACCC may accept court enforceable undertakings under section 87B of
the Act or may issue an infringement notice against the person or company for commission of
breach of section 18 and 29(1) of the Act, but it is better if the ACCC resort to litigation. The
court may either make declaration about the breach committed by the company regarding
“slendertone’ or require the company to publish notice about their conduct and rectify the
advertisements. The ACCC may seek monetary penalties against the company or claim
conviction for such infringement.

5FUNDAMENTALS OF LAW
Reference List
Ahmad, F., 2016. 07_False and Misleading advertisements-Legal Perspectives.
Australian Competition and Consumer Commission v Telstra (2007)
Competition and Consumer Act 2010 (The Act)
Given v C Holland (Holdings) Pty Ltd [1977]
Google Inc v Australian Competition and Consumer Commission [2013] 249 CLR 435
Howells, G. and Weatherill, S., 2017. Consumer protection law. Routledge.
Hunt, K.M., 2015. Gaming the system: Fake online reviews v. consumer law. Computer Law &
Security Review, 31(1), pp.3-25.
Pearson, G., 2017. Further challenges for Australian consumer law. In Consumer Law and
Socioeconomic Development (pp. 287-305). Springer, Cham.