Case Study: Business Detriment & Misleading Conduct in Australia

This case study examines misleading conduct and business detriment within the context of Australian Consumer Law, particularly focusing on Section 52 of the Trade Practices Act 1974 (CTH). It analyzes the Colgate-Palmolive Pty Ltd v Rexona Pty Ltd case, where a misleading advertising campaign claiming superior product effectiveness led to legal action. The court's decision, which favored Colgate-Palmolive and required Rexona to withdraw the advertisement, highlights the broad interpretation of Section 82 and its impact on competition and innovation. The case underscores how false claims can harm competition and the importance of considering both demand and supply-side losses when determining damages. Desklib offers a platform for students to access this and other solved assignments for academic support.

AUSTRALIAN CONSUMER
LAW
Misleading Conduct and Business
Detriment.

INTRODUCTION
 The consumer protection provisions are
not only related to the demand side but
also the supply side of the market.
 At an expense of a superior product
demand a demand for an inferior
product is generated through misleading
advertisements.
 This situation cases injury to
competition
 It also causes injury to the supply side of
the market.

TRADE PRACTICES ACT
1974 (CTH)
The Act had been enacted by the
parliament in order to promote
competition and provide protection to
the consumers form being exploited by
businesses.
Section 52- Under the section an
organization is not allowed to engage in
a conduct which can be considered as
deceptive or misleading in trade or
commerce.

COLGATE-PALMOLIVE PTY
LTD V REXONA PTY LTD
Facts
 The case included a very expensive
advertisement campaign.
 A claim had been made that product of
the defendant was 50-90% more
effective than the product of the plaintiff
 A legal claim against the breach of
section 52 of the TPA had been made.

COLGATE-PALMOLIVE PTY
LTD V REXONA PTY LTD
 Decision of the court
 The court found that alleged conduct of
the defendant was a breach of section
52 of the TPA
 The court ordered injunction in favor of
the Plaintiff
 The defendant had to with draw the
Advertisement.

IMPACT OF THE DECISION
In this case neither consumers nor small
manufacturers were the parties as per
the defendant however the court stated
that such cases have direct impact on
the consumers.
A broad interpretation of section 82 of the
TPA had been done in this case.

IMPACT OF THE DECISION
 Misleading conduct can harm
competition
 Premium claims which are false in
nature prevent suppliers to make
innovation
 Damages are to be determined by
analyzing loss on demand side and
supply side

REFERENCES
 Colgate-Palmolive Pty Ltd v. Rexona Pty
Ltd - [1981] FCA 167
 The Trade Practices Act 1974