The legal obligations of marketing
Businesses must be mindful of the relevant regulations when setting prices and advertising products or services to ensure they aren’t misleading their customers.
Like many other areas of business, marketing efforts are regulated and need to comply with the legal requirements.
When promoting products or services, businesses must ensure that any branding, statement, quote or other representation is not false or misleading. There are some tactics businesses use to try to advertise products that make them more appealing but don’t necessarily give the full picture, such as:
- Component pricing; when the price of a product or service is advertised or displayed in separate parts. When advertising uses component pricing, companies must also provide the full price inclusive of additional costs in a prominent way.
- Bait advertising; where a product is advertised at a certain price without a reasonable supply. Bait advertising is illegal if a business sells the product knowing that they cannot meet expected demand. Being aware of advertising regulations is an important aspect of running a business to its full potential.
There are specific Australian email marketing laws and standards of practice that must be adhered to when developing an email marketing service for your business. The Spam Act 2003 governs email marketing and messages sent via SMS, MMS and instant message in Australia.
The Act covers three main areas:
- Consent; you must have consent from the recipient in order to send a commercial electronic message that offers, advertises or promotes the supply of goods or
services. Consent can either be expressed (the recipient has deliberately opted-in to receive emails) or inferred consent (refers to the relationship between the sender and the recipient, e.g. subscriptions).
- Identification; the sender of the communication must identify themselves and provide accurate contact information that is valid for at least 30 days after the message is sent.
- Unsubscribe options; there must be an unsubscribe option for emails or an option to opt-out of other electronic messages.
Factual messages such as emails that provide a price, product description or quote to a customer are exempt from the Spam Act as their purpose is not promotional.
Signage and brochures:
Before you place a sign, you need to apply for a permit for display from the state or territory government and in some circumstances may also require public liability insurance. Signage includes ‘A’ frames, sandwich boards, or permanent signs on buildings, footpaths or roads.
Handing out brochures, flyers or promotional materials on public property also typically requires a permit. Under state environmental protection legislation, it may be illegal to place advertising material on a vehicle. Both permits can be downloaded through the ABLIS website for the relevant state or territory.