Challenging a competitor’s advertising claims

The Ad Standards’ Industry Jury service is a cost-effective and efficient alternative to litigation.

As the Federal Court of Australia decision Unilever Australia Ltd v Beiersdorf Australia Ltd [2018] FCA 2076 makes clear, although litigation is an important part of the justice system, it can often be long, drawn out, stressful and costly for both the client and the lawyer.

In that case, the Federal Court considered an application by Unilever that alleged Beiersdorf’s marketing of the “Nivea Stress Protect Clinical Strength” range of antiperspirant deodorants was false or misleading as a result of a number of implied representations about the efficacy of the products.

Unilever’s application was dismissed on 20 December 2018 –more than two years after it had filed its amended application, and over four years from when the new Nivea deodorant range was first launched in Australia (July 2014). This was even though Beiersdorf ceased supplying the Nivea Stress Protect Clinical Strength products in Australia from around 31 December 2016.

On 25 February 2019, Unilever filed an application to appeal the decision before the Full Federal Court, but the matter was recently discontinued on 2 August 2019.

Advertising disputes – Alternatives to litigation

Lengthy court proceedings such as these, do not provide an advertiser with the opportunity to challenge a competitor’s advertising claims in a quick and cost-effective way. Whereas alternatives to litigation can provide a pathway to achieve an early outcome that is satisfactory to both parties.

One option that is specifically tailored to resolving advertising disputes between competitors is the Ad Standards’ Industry Jury service.

Ad Standards administers Australia’s national system of advertising self-regulation complaints. A key component of the system is the Ad Standards Industry Jury that considers complaints by one advertiser or business against another in relation to truth, accuracy and legality of their advertisements. It can also consider complaints about misrepresentations likely to cause harm to the business of a competitor.

One of the greatest benefits to advertisers in using the Industry Jury service, is the ability to clarify the issues and understand the substantiation of any claims, in a fraction of the time required for litigation.

The service is quick and cost effective with the whole process taking generally around 12 weeks. Costs associated with the process typically range between $20,000 to $25,000 (incl GST) depending on the length and complexity of the complaint.

Industry Jury cases are reviewed by a variable panel of highly qualified Australian lawyers who specialise in advertising, competition and consumer law.

Odette Gourley, Partner at Corrs Chambers Westgarth, who has been involved with the Industry Jury as a panel member for almost 20 years, having chaired the first Industry Jury complaint in 1999, says:

“The Industry Jury is a real option for resolving truth in advertising disputes between  competitors that should be considered by advertisers and their advisers, and I discuss it with  clients in all appropriate cases. The standard of decision making is generally good because  those who make up the Panel are experts involved in advertising issues on a regular basis”.

For more information check out our FAQs and read about one of our latest Industry Jury cases.

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