Is Native Advertising Misleading or Deceptive?

With more and more consumers consulting the internet before they purchase goods and services, the harder it is becoming for consumers to differentiate between truth or fiction. This is due to the prominence of review platforms, blogs and social media posts. It is not a secret that online marketers to create customer loyalty, turn to these platforms. But issues can crop up concerning the Australian Consumer Law (ACL) and misleading or deceptive conduct. We set out below the legal issues concerned with native advertising.

How is Native Advertising Defined?

Native advertising refers to, as mentioned above, online content in the form of reviews, blogs or social media posts. Traditionally in print media, this content would have had the form of an advertorial. Ultimately the advertising is repackaged to fit in with the medium. As an example, a blog post that provides make-up tips may be using specific beauty products that are supplied by a business. Online, this can also come in other forms, for example, tweets or review posts that the business commissions and pays for.

What’s the Legal Issue with Native Advertising?

There are legal issues when it comes to native advertising mainly due to the ACL’s strict requirements. The applicable provisions relate to misleading or deceptive conduct. Prior comments by the Australian Competition and Consumer Commission and case law have indicated a few things:

• Content may mislead consumers if it is presented in a way that is independent but was actually produced by someone who was paid and had not used the goods or products; and
• Content may mislead consumers if it was produced by someone who actually inflated their review of the good or service in return for financial or non-financial benefits.

Are There Any Issues With Providing Incentives?

Many businesses may also consider utilising incentives to influence writers or online platforms. This may also cause issues, and there are guidelines on this commercial relationship. When it comes to reviews, for example, incentives need to be equally provided to reviewers who may write a positive or negative review.The incentive also needs to be provided regardless of whether the reviewer writes a positive, or damning review of the good or service. The incentive also needs to be known to consumers who may be relying on the reviews.

Key Takeaways

To ensure you are compliant with the ACL, it is important to understand how misleading and deceptive conduct may apply to native advertising. One of the main things to keep in mind is that disclosure of any commercial relationship between your business and an online writer, reviewer, blogger or tweeter will help in avoiding any misleading or deceptive conduct claims.

Questions about whether your native advertising complies with the ACL? Get in touch with our consumer lawyers.